Podcast Intro: You’re listening to ChooseFI. The blueprint for financial independence lives here. If you’re looking to unlock the secrets to financial independence and early retirement, you’re in the right place. Stay tuned and join a community of like-minded people who are getting off the Instagram and taking control of their lives in the pursuit of financial independence. ChooseFI, your home for financial independence online.
00:00:00
Jonathan: Hello, everyone. This is Jonathan kicking off the intro for today’s episode titled Incremental Gains. It’s a little bit misleading because what we actually want to do is introduce you to the table of contents for the financial independence community. Brad’s been making a list and checking it twice. Well, at least for the making a list part, we’ve been making a list of ideas that have expanded our horizons of what is possible and why the financial independence community, why you are so positioned to win.
00:00:34
Instead of just trying to take one of those topics and do a deep dive, which is the way that we’ve done things historically, we wanted to mix things up. Let’s throw everything at the wall and see what sticks. But why take this approach? Well, it’s to do two things. First, to pique your interest. If you know, maybe you’re interacting with these concepts for the first time or maybe you’ve been around the financial independence community for a while, we want to get you thinking about things that maybe haven’t been as present on your horizon. When you first interacted with the financial independence community, you were at one stage, and here you are maybe a year or two later. There are other tools that you just haven’t thought about recently that are now relevant for you now that you’re farther on your journey. And with that, welcome to ChooseFI.
00:01:25
We’ve been duking it out as to who would be doing the intros and the titles. One of us won that, and well, I’m doing the intros. Make of that what you will. So with that, I have Brad here with me today. How are you doing, buddy?
00:01:40
Brad: Oh, Jonathan, I am doing quite well. This is fun. I love being back on the show with you.
00:01:44
Jonathan: Yeah, this is going to be a blast. Hey, the title, Incremental Gains. We’re going to get to that the long way, right? I mean, have we ever in our lives gotten anywhere the short way? That title is going to be explicitly obvious by the time that you finish this episode. But in the short term, let’s go on a detour. Brad, I’m just getting back from a red X month.
00:02:05
Brad: Ooh. So what is a red X month?
00:02:07
Jonathan: Yes. Vincent Puglisi brought this to our show, brought this to our community. Again, everyone in our community knows this. Brad and I have very few ordering on zero original ideas, but we do get very excited about awesome ideas that we’ve interacted with over time. We love to highlight them so as many people know about them as possible. The red X month was Vincent Puglisi taking a look at his calendar and saying, hey, for this window, this season, it could be small, it could be a week, could be two weeks, could be three weeks, but I’m going to take a look at my calendar and I’m going to put a red X in a box right now. That’s the idealistic one. That’s the one month red X. Big old red X.
00:02:42
I did it, man. I did it for December. Now, there’s levels of red X-iness. Mine might’ve been trending towards pink because I was doing a little bit of just, you know, putting out a few fires here and there, but I would say less than an hour of work a week. We went to Cape Town, one of the most beautiful places in the world. You know, I burnt, I peeled, I burnt again and wondered about the long-term damage of sun exposure, hoping that, you know, it’s good. It’s good. You know, sun is healthy for you and recharge, but we’re back now and I’m excited to be here.
00:03:12
Brad: Wow. So, okay. Cape Town. It’s funny. I thought you went to Zimbabwe to visit Danny’s family.
00:03:16
Jonathan: I can see how you would think that. They do, my wife’s family is from Zimbabwe. They still live in Zimbabwe, but you know, a lot of Zimbabweans no longer live in Zimbabwe. They live around the world. In particular, a lot of them live in South Africa, the UK, Australia. It’s just that, you know, there’s a lot of Zimbabwe expats. So my in-laws do live in Zimbabwe, but their relatives live in South Africa. My sister-in-law had her 40th birthday and we did a family beach trip to Cape Town, which has unparalleled, incredible beaches.
00:03:49
Brad: Very cool. Okay. That’s somewhere I’ve never visited, but it’s certainly on the list. And let’s go back to the red X month, because I think this is of real interest to people. This is maybe akin to Jillian’s mini retirement, right? So there is a subtle distinction though, and I think this is important, is that this is really, and like you said, you’re bordering on pink. You might be bordering on yellow, depending on the day. That’s how I know you.
00:04:13
Jonathan: How many times did I text you and you responded instantly?
00:04:20
Brad: It takes practice, man. It takes practice.
00:04:22
Jonathan: Yeah, yeah, yeah. So we’ll say bordering on pink. Oh man. But I think it’s really the mindset, right? Of like, Hey, I’m away. Like I am taking a step away from my regular life. And I know we talked about this years ago where I took my daughters and we did a red X month in Maui. We did a red X month in Scotland the year before that. And then COVID intervened and life intervened, et cetera. But there is something really magical about that. And I think this is not only aspirational for all of us in the FI community, but I think it’s very possible because again, it’s a mindset.
00:05:05
It might just simply be, Hey, I still have to go to work, but I’m taking a red X month from all the other things in my life, all these other responsibilities and meetings and scheduling. Just take a red X month from scheduling things and just have some free space, have some time where you can do whatever it is you want to do with some deep work. If you want to do just reading, if you want to play games, whatever it is, take a red X month, it can be very literal like Jonathan almost did, or it can be however you see it. But I think Jonathan taking a step away is really healthy and really important.
00:05:37
Jonathan: Yeah. As I kind of think about that window of time and that coming back, we say this, it is the journey. It’s not the destination. Like if you really understand the playbook, the detours are the magic of this thing. Last episode, we told you, all right, here’s how you’re going to calculate your financial independence number. And then you looked at that and compared it to your bank account and you realized that there’s a gap. All right. And then maybe the calculator that you used to do it gave you some insight into how long before you close the gap based on what you know about your current ability to contribute. And you said, all right, I guess, 10 years, 12 years, 15 years from now, and then this will be awesome.
00:06:12
You missed, if that was the case and you missed it, you are going to accrue power from the day you did that calculation and start applying a little bit of intention into this. So this might be your day seven, right? You did it. You’re aware you have a number in mind and you’re working towards that next piece. And you’re like, all right, well, what’s the one thing now? Like I did the math calculation. What’s the one thing now? Brad and I, over the course of this episode are going to try to roll out 50 to 101 things, right? That this show is going to put in your awareness over the coming year that you just wouldn’t have contemplated or thought about before. And I want to point out, this is the magic of this community. You started here because maybe there was something that you were recoiling from, and it was a defensive posture. But if you get time to explore this, you realize that as soon as you’ve done this for a couple of months, a couple of years, what you have for the first time in your life is options.
00:07:21
Brad: Yeah, without a doubt. And the detour is the journey. I think, like you said, it’s about taking that time along the way to appreciate it because FI is simply not about reaching some mythical number on a spreadsheet. It is about living a better life in every aspect. And when you have the space financially, that might mean the first couple thousand dollars, right? If you don’t have a thousand dollars saved up, you are in an emergency, my hair is on fire situation. So the very first time you save a thousand dollars, you have so much more space. You have so much less stress. And then you start getting 5,000, 10,000, 50,000, 100,000, and it just starts snowballing. Then you can take a step back and all along that way, really focus on the important stuff.
00:08:55
Jonathan: And it’s interesting, Brad, because you brought that up about really the journey and my older daughter, Anna and I were actually putting together one of her Christmas presents. So she’s a massive rollercoaster fan.
00:09:10
Brad: Okay.
00:09:10
Jonathan: She is still enjoying rollercoasters. It’s funny, these rollercoaster enthusiasts keep track of all the rollercoasters that they’ve ridden and they call each one a credit. In the four years since she’s been a rollercoaster fan, she’s now ridden 188 different rollercoasters.
00:09:24
Brad: So is it safe to assume that fear of heights is not an issue for her?
00:09:30
Jonathan: Yeah, I think that’s fairly safe to assume. I can reassure everyone after going to table mountain in Cape Town that I still have a very healthy quaking in my knees, fear of heights. When I was watching my kids go up near the rock walls and the edges, that was compounded by a factor of 10, and I was like, don’t you know, we can all die at any time? I’m usually able to mostly keep it under control. I do really enjoy rollercoasters, but I thought I could intellectually overpower this like slowly building fear of heights.
00:09:56
Brad: And how’s that working for you?
00:09:57
Jonathan: Not so well. I thought maybe you can just go and stare over the edge long enough and suddenly this will be resolved. Now you can go watch the movie Free Solo?
00:10:04
Brad: Yeah, I can’t even watch Free Solo.
00:10:07
Jonathan: Like, that’s just, that’s just horror movies. I’d rather sign up for a marathon of the Exorcist than go watch Free Solo. That’s where I am.
00:10:11
Brad: Yeah, I’m with you. I mean, yeah. Anytime you can take one step and fall to your doom, probably not ideal, but, you know, this is me and the next step, there’s the people caribbean down the mountain. I’m like, we’re just—there’s something different in our DNA.
00:10:28
Jonathan: But I tucked away under a restraint on a rollercoaster is not so bad. So anyway, we found on Etsy, this guy named Coaster Bricks, who basically puts together PDFs of Legos that you can buy. It’s this really cool thing. He sells PDFs for like $7 and it’s of hundreds of different roller coasters.
00:10:47
Brad: Very cool.
00:10:48
Jonathan: You can buy each individual one, like your favorite coaster, let’s say, which hers is VelociCoaster down in Universal Studios in Florida. And then he gives you the instructions on how to buy the bricks individually through either Lego or there’s like some other knockoff site called WeeBrick.
00:11:03
Brad: That’s interesting.
00:11:04
Jonathan: So you get the Lego show up, and you have this 100-page PDF that he put together, and you start building them. And it was so interesting because Anna got—she just wanted it to be done. She got instantly frustrated. In fairness, I don’t know that she’s ever put any Legos together. I know I’ve done it with Molly before.
00:11:24
Brad: And what is the number of pieces that we’re talking about?
00:11:26
Jonathan: It was like probably 1,000. I mean, that’s a pretty big commitment.
00:11:30
Brad: Yeah, it was like—I’m not sure if it was exactly—it was somewhere on that order, but it was like, yeah, it was like $60 or $70 to buy the bricks. It was a really neat thing. This is actually very cool.
00:11:42
Jonathan: And then like I said, like $7 for the PDF. But it was interesting because I actually had that thought about like you have to enjoy the journey. And we actually had that talk at the end where I’m like, you know, part of the fun here is putting this together.
00:11:01
Jonathan: And part of the fun is also having setbacks sometimes. I think that’s a really interesting relation to life; life is not just straight up and to the right. If it was, it would be boring. We all go through setbacks. We all go through hard times, and I think that’s part of the spice of life, frankly. I know I’ve talked about this repeatedly in the past year in response to this middle-class trap thing.
00:11:31
Brad: Oh, it may. I may have become aware of it.
00:11:34
Jonathan: From my ranting and raving? You know what? Disagreement is healthy. I love it. I love it. So I’m glad that the conversation happened last year, and I think the community is better for it. Even if there’s polarizing opinions, I just think having the conversation is valuable, and I’m happy to be, I mean, not in the room, but listen through my ear pods.
00:11:57
Brad: Yeah, no, agreed. And yeah, I mean, I think it’s important to lean into hard things sometimes instead of running from it. It feels safer to run from hard things. But like, whoever was proud of themselves by just taking the easy route all the time? It just doesn’t make sense. That’s not life.
00:12:15
Jonathan: So anyway, this was a nice learning. But you know what? You only realize that after on the other side. I mean, there’s this tie in here.
00:12:24
Brad: Yeah, I know you were saying that’s neither here nor there. And here I am doubling down.
00:12:26
Jonathan: And we like 15 minutes later, we’re resolving this. We’re putting a hammer in our own coffin, and we’re like, you know what? We were going to give you a hundred things, but it’s looking a lot like 10.
00:12:35
Brad: Yeah, it’s looking like three episodes of incremental gains. We’re going to have to record on the back end that it was going to be a double parter.
00:12:41
Jonathan: Here’s a great example: my son is now eight years old, and the show started roughly around the time that he was born. I mean, the show was maybe started just six months prior to him. Yeah, he’s going to be nine soon, in a couple of months.
00:12:52
Brad: Yeah, gotta be, you’re right. Thank you, you’re right. Your method of accounting for time is more accurate than mine. He has a birthday coming up in the next few months.
00:13:00
Jonathan: So with that in mind, we’ve actually been kind of slow to introduce him to tech. I know there’s different ways; people have different opinions on this. Certainly, I think I would agree that you need to be proficient at technology, and it would be to your detriment to not know anything about technology going into the world that is coming here.
00:13:18
Brad: Sure.
00:13:19
Jonathan: So with that just kind of understanding in mind, yes, he’s going to become aware of tech and how to use it, but when and how is an open-ended question in our household. Having said that, I just got him set up with Minecraft this year, playing it for the first time.
00:13:32
Brad: Nice!
00:13:33
Jonathan: And when you’re learning how to play, and again, I didn’t really grow up with Minecraft. I was just a little bit before all of that came on, but I know it’s captured the imagination of a generation of people. It’s millions and millions of people that play this.
00:13:43
Brad: For sure.
00:13:44
Jonathan: And also, not for nothing, there’s an aspect of world building. There’s an aspect of puzzle-solving and creativity, and I can appreciate a lot of the attributes that go into this game. So it’s one that I was kind of interested in him just dabbling around the edges with.
00:14:00
Brad: Absolutely.
00:14:01
Jonathan: And when you start playing Minecraft, you have two options: one survival mode and one creative mode. Creative mode, nothing bad can happen to you; you have everything, do what you want. My son would like that a lot.
00:14:09
Brad: Yeah, that’s appealing.
00:14:10
Jonathan: I could just have all the things. I’m like, yeah, but, Zachary, there’s a mechanism behind this game. If you just—it’s fine to be over there and see what’s possible to know it exists, but if you never want to go to the other side and actually do the game, play the game, you’re going to miss the journey.
00:14:25
Brad: Right, right.
00:14:26
Jonathan: So you see why I’m like, I’m literally saying this within the last two weeks and I’ve had to hit it, because he keeps falling back. Oh, I’m going to go and delete this creative mode. I’m gonna delete it. You will go to survival.
00:14:35
Brad: Exactly.
00:14:36
Jonathan: You know, it’s that sort of thing. But it’s like, all right, we gotta take Maslow’s hierarchy of needs, right? We gotta solve, we gotta have a shelter. We gotta have a place to sleep. You don’t wanna be staying up with those zombies taking you out, man. You gotta get to the next day.
00:14:45
Brad: Very true.
00:14:46
Jonathan: Here’s how you build basic resources. And again, by the way, I say all this, I don’t actually know how to do anything in this game. Like if there’s a level below a newbie, that would be me. I’m only doing this more as a gateway to him, just to be able to interact with him and learn this game together.
00:15:02
Brad: Sure, sure.
00:15:04
Jonathan: As opposed to just doing something like Smash Brothers, hit him on the head again, hit him hard, you know. I can see that there’s merit to delayed gratification and incremental puzzle-solving where because you do this, this opportunity opens up to you. Because you do that, these opportunities open up.
00:15:20
Brad: For sure.
00:15:22
Jonathan: But again, he wants the creative easy way where you just have everything. And we all do, don’t we?
00:15:26
Brad: Of course you do.
00:15:27
Jonathan: Just give it to me. If my parents had given me the money, if I had the silver spoon, if I’d done—think about it. Just play it out. And you know, there are individuals that just were, it was handed to them. It was given to them. Do they appreciate it?
00:15:40
Brad: Right.
00:15:41
Jonathan: I know at some level, absolutely. But you know there’s a difference between when you figured it out yourself or when you had an invested role in it versus when something was just handed to you.
00:15:51
Brad: 100%.
00:15:52
Jonathan: And that speaks to the fact that $100 is not $100. The how you get there is as important as the outcome. So whether we’re talking about how do you introduce your kids to tech? Brad and I will have plenty of opportunities to go down those detours. My family’s homeschooling this year; I’m very excited about that.
00:16:06
Brad: Nice!
00:16:07
Jonathan: I didn’t know that was gonna be a thing that we were going to be doing, and we’ll certainly have a chance to talk about that. But whether you are talking about how you are mentoring your kids and helping them or how you’re going to tackle this idea of incremental gains and what’s your mindset gonna be, there’s so much merit here, and you’re gonna just look for it.
00:16:26
Brad: Definitely.
00:16:27
Jonathan: Don’t just disregard anything that isn’t immediately tied to the outcome you want. Take advantage of this, the amount of time, the power over your time that you’re accruing, the flexibility and the options, and just say, it’s okay to look around.
00:16:40
Brad: Exactly.
00:16:41
Jonathan: And what do I wanna do next? Because that’s what you have. You have options, and you are reclaiming. It’s not a present tense, past tense. You are reclaiming your most precious non-renewable resource: your time.
00:16:51
Brad: Well said.
00:16:54
Jonathan: All right, so Jonathan, incremental gains, right? You started us 15 minutes ago with, so it’s 5 a.m., I just got back from Zimbabwe.
00:17:00
Brad: Right.
00:17:01
Jonathan: I’m jet lagged, my Red X month, and then we took a 15-minute detour. Where were you going with that? Because I think that was the start of incremental gains.
00:17:08
Brad: Indeed!
00:17:11
Jonathan: Everything changes, everything stays the same. Incremental gains, so I’m—Jonathan can talk.
00:17:14
Brad: Yes, Jonathan can’t stop talking—that’s the problem.
00:17:16
Jonathan: So I’m back from Cape Town; I’m experiencing jet lag, and it’s actually working to my benefit because I’m bouncing up at 5 a.m., and I have this desire to start taking care of my health. I’ve been doing a lot of development, so I haven’t had a lot of time. I felt like I haven’t had a lot of time. So this whole, I’m just gonna brute force things and out-calorie and outwork myself—that’s just going out the window. That was a luxury. I gotta be very judicious with how I use my time.
00:17:43
Brad: Absolutely.
00:17:44
Jonathan: So I’ve kind of taken—I’ll just say this out loud, Brad. You recorded an episode that blew my mind: episode 516. I was not a part of that episode; I listened to it after I saw repeated feedback from members in the community, and I’ve continued to see a stream of messages from people coming in.
00:18:01
Brad: Nice.
00:18:02
Jonathan: And you know how sometimes you say something to someone, and you have a great idea, and that person just won’t hear it? They won’t do it. All of us have had this; we have, we want to tell them about financial independence, we want to do X, Y, Z, and they just won’t hear it. But then suddenly they hear it from somebody else. Well, that was me; we’ve all been guilty of this. I did this to you; you did this episode; you told me about it. I just had my own ideas.
00:18:19
Brad: Sure.
00:18:20
Jonathan: And so here I am, and I’m like, you know what? I know my plan isn’t gonna work; I don’t have the time to do my plan. Let me just start over; let me go listen to this. And then I was just shell shocked as I had a paradigm-changing experience listening to episode 516.
00:18:34
Brad: Awesome.
00:18:36
Jonathan: Did anybody get that? Did you write that down? ChooseFI.com/516; it’s called a masterclass on building muscle. And Brad recorded it with Dean Turner. So that is as big of a shout out as I can give to a single episode, maybe ever, and I’m just telling you, play that one next. If you’re all interested in thinking about building muscle and having the healthiest year of your life, you should go listen to that.
00:18:50
Brad: Great advice!
00:18:51
Jonathan: All right, well, here I am, and I’m going to the gym at 5 a.m., and I know that Brad and I are gonna be recording, and I’m just having this thought about this incredible overlap between what I’m going to be doing if I follow through on what you discussed in that episode and this path to financial independence, this idea of incremental gains.
00:19:09
Brad: Absolutely.
00:19:10
Jonathan: And it’s not resulting where you are, you know, a success or a failure based on that workout. It’s literally impossible to fail. In fact, the point is, get your ego out of the way. You do what you can do; you follow the plan; you let the results take care of themselves.
00:19:24
Brad: Very true.
00:19:25
Jonathan: You follow the plan. And if you were to look at the end of the workout, just a single workout, and decide whether you were a success or a failure, it’s ridiculous. What you’ve done is you fundamentally changed the way that you were approaching health and fitness. And that’s okay because if you think about what you’ve done up to this point in time, has it really worked for you?
00:19:52
Jonathan: Has it really worked for you? If it has, great. But if it hasn’t, that’s why you’re still listening. So in that case, what if there was something that we didn’t know we could do? We didn’t know, and we realized just like with personal finance and financial independence, instead of just demanding the outcome, demanding the everything, we got excited about the journey and the process of incremental gains.
00:20:15
Brad: Nice. I love it. And I appreciate that you finally listened to that episode. What’s interesting is we worked out together a few years ago when I was actually getting started with this programming with Dean, and I think what’s interesting, like you have been really fit in your life at points and you’ve been going to the gym for decades.
00:20:37
Jonathan: And I think sometimes—and obviously this is not to—I’m okay with you saying this. You have permission to say what you’re about to say. You had a lot of preconceived notions from the gym. And I think that has probably served you well in a lot of aspects of life. And I think in this instance, it might have hindered you from really buying in. And that makes sense from a worldview.
00:21:00
Brad: Yeah.
00:21:17
Jonathan: I think it’s hard sometimes to have the white belt mentality of just, “Hey, I’m a newbie, I’m going to start over, and I’m going to trust in the process.” I think there’s a lot of parallels to FI in that this is really starting afresh. Maybe you’ve learned some bad lessons about personal finance in the past. Maybe you’ve learned virtually nothing, but you’ve just been muddling along, and now you realize, okay, this is a total reorientation on my life.
00:21:30
Brad: Definitely.
00:21:33
Jonathan: It was interesting, I think, not two hours ago, and I didn’t know we were going to talk about this today, but I was texting with my good buddy, Adam, who I’ve known for literally 40 years. I was saying to him, cause we were both talking about our parents and how they’re getting older and maybe have some health challenges and such. I was saying to him, I’m like, “Look, I think you should listen to episode 516 and let’s talk about it afterwards.”
00:21:53
Brad: Nice.
00:21:55
Jonathan: I kid you not, Jay, this was two hours ago. I’m like, “This will change your life because it is a superpower on the level of FI.” It’s a really cool thing to be able to start over in life, just in any aspect, to have a fresh mindset, learn new things. I think this is a critical part of having a good life; I’m open-minded to new information.
00:22:10
Brad: Absolutely.
00:22:14
Jonathan: There are times where I’m just going to say, “All right, I trust in the process, I’m going to put the inputs in because I’ve seen other people succeed.” What’s cool is when I went to Bali for the financial independence event that Amy Minkley puts together, that was 14 months ago. I’m not too egotistical about this, but like I’m in pretty good shape and a lot of people notice.
00:22:34
Brad: Right.
00:22:39
Jonathan: It was a good feeling, but there was this one guy, Tanmay, who is just a really incredible guy and we were talking. He hadn’t done a ton of fitness in terms of muscle building, but he just wanted to start.
00:22:54
Brad: Nice.
00:22:54
Jonathan: What was interesting, is for New Year’s, a bunch of us put like happy New Year’s posts in the WhatsApp chat for that Bali event. I kid you not, Tanmay’s biceps busted out of his shirt 14 months later after following Dean’s programming; to the point where four different guys noticed and were like, “Holy cow, what are you doing?” I’m like, “Damn, he just followed the process.”
00:23:22
Brad: Trust the process, right?
00:23:23
Jonathan: Exactly. I mean, trust and verify, but it is so easy to drop facts on people, right?
00:23:30
Brad: Absolutely.
00:23:34
Jonathan: In a minute, we’re going to drop a ton of things just to be aware of, but dropping facts on someone is almost irrelevant by themselves. What makes it important? What locks it in is the person understands the why.
00:23:46
Brad: Very true.
00:23:48
Jonathan: That’s why I say it’s fine. I could have a list of what workout I did this morning, but why didn’t it lock in? I didn’t have the why, right? I could have done the workouts with you, but I didn’t have my own logbooks. I wasn’t following the process. The why wasn’t mine; it was your why.
00:24:04
Brad: Got it.
00:24:04
Jonathan: I never took the time to lock in my why. I was just doing workouts and yeah, it was good, but there was a fork in the road. I stopped doing the workouts with you due to time constraints and now I’m doing my own thing. I’ve gotten results in many different ways, but you’ve been able to chart a path where you have satisfaction for 12, 24, and even 36 months at a time.
00:24:30
Brad: Absolutely.
00:24:41
Jonathan: That’s a pretty incredible deviation from those of us who find ourselves going through New Year’s resolutions, leaning in for 90 days and then getting so fried and exhausted or maybe we hit our goal and then just revert to normal versus someone who had a why and carved out a life that leads to the outcome they want.
00:25:07
Brad: Exactly.
00:25:12
Jonathan: That is what we’re talking about with financial independence. And when we talk about these things, a lot of what you’re going to hear might sound like a foreign language. Some of it, you might know a bit about, and some of it you may want to go into more details.
00:25:20
Brad: Definitely.
00:25:22
Jonathan: Two things come to mind: you are not responsible for knowing everything today; it’s not the point. It’s just to showcase that there’s a lot you don’t know, and a lot you haven’t interacted with.
00:25:30
Brad: Absolutely.
00:25:35
Jonathan: Let’s get into it—incremental gains. We’ve touched on a couple, which is great, but I’m going to start and we’re just going to bomb through as many of these as we can.
00:25:48
Brad: Are you telling me I can’t comment on each one?
00:25:51
Jonathan: No, we can comment at your leisure.
00:25:54
Brad: I’d love to take four episodes to do this; I think it’d be fantastic.
00:25:59
Jonathan: First one I’ve got: don’t buy a mutual fund of one company at another brokerage.
00:26:08
Brad: Okay.
00:26:10
Jonathan: A lot of people get into trouble because in years past, we talked almost exclusively about VTSAX, and it really became a meme, I think, because of JL Collins’ incredible book, “The Simple Path to Wealth.” It became like the thing that people bought in the FI community. It’s very important to know that.
00:26:29
Brad: Agreed.
00:26:31
Jonathan: So that’s a Vanguard mutual fund. People hear this term VTSAX over and over, and they think they have to buy that. You don’t have to buy that. Let’s be clear, but certainly don’t buy it if you’re at another brokerage like Schwab or Fidelity or anywhere else because you get clobbered with fees.
00:26:45
Brad: Right.
00:26:46
Jonathan: Now, the general thing that we talk about are actually exchange-traded funds (ETFs). So VTI is the new VTSAX. Jay, I don’t know if you knew this, but for years, I’ve been saying VTI, VTI, VTI. We’re moving away from VTSAX because people get into trouble due to fees.
00:27:03
Brad: Exactly.
00:27:08
Jonathan: There are almost never fees when people buy VTI.
00:27:10
Brad: Got it.
00:27:12
Jonathan: I have some VTI that I purchased through Schwab. I think I also maybe purchased some BOO.
00:27:18
Brad: Right.
00:27:19
Jonathan: Let’s take a half step back on that one and just say that there is a difference between ETFs and mutual funds, and notably, this is a really important concept. Mutual funds are convenient and easy on most platforms because you can purchase fractional amounts. You might need $30 or $40; you can just put in that amount and purchase a fractional amount of the mutual fund.
00:27:36
Brad: Exactly.
00:27:37
Jonathan: ETFs—you’ve got to purchase a full share, so if VTI is $240 a share, you need to purchase $240 increments. Mutual funds resolve at the end of the business day, so you could say, “I want to purchase it now,” but you’re getting the price at the end of the business day.
00:27:51
Brad: Right.
00:27:53
Jonathan: ETFs are purchased at the exact price that you buy them within the window.
00:27:57
Brad: Understood.
00:27:58
Jonathan: There’s a lot of nuances here, and also much of what I’ve said can itself be incorrect depending on the platform you use. If you go to something like M1, they will let you do fractional shares of ETFs using some proprietary mechanism.
00:28:12
Brad: Yep.
00:28:13
Jonathan: So there are very few absolutes, but these are a few of the defining characteristics of ETFs versus mutual funds.
00:28:18
Brad: I love that.
00:28:20
Jonathan: Interestingly, I just opened up a Roth IRA for my older daughter, Anna. She had her very first earned income this past summer; she was the head of a swim lessons program at our pool.
00:28:34
Brad: Nice!
00:28:34
Jonathan: She made about 1,100 bucks. So I opened up a Roth IRA for her, and now at Vanguard, it’s in her name. It’s a custodial account because she’s not 18, but I put in $1,100, or she put in $1,100, with my help.
00:28:53
Brad: Great.
00:28:54
Jonathan: They let me buy in terms of dollars, so I bought a fraction of a share—she ended up getting 3.24 percent of a share, which is fantastic.
00:29:04
Brad: Nice.
00:29:05
Jonathan: That’s really cool because I was under the impression that I could only buy in full shares. At least at Vanguard, they allowed me to do that, which is nice.
00:29:46
Jonathan: But that’s pretty cool. And again, this is a nice thing. My incremental gain here is the Roth IRA for kids. If your child has earned income, they can put money into a Roth IRA up to that amount. And the nice thing is, it doesn’t have to be the same dollars that you earned. It’s not like it has to go from your paycheck directly to, it’s just, do they have that earned income? If so, that can go in the IRA and the Roth in this case.
00:30:11
Brad: Okay, well, oh man, I can’t comment on all these.
00:30:15
Jonathan: Okay, we can do multiple episodes, fine. Maybe we just break it up and split it out for a couple of weeks, but the commentary is good. You did a comment on my comment. That’s, what? There’s always comments. Roth IRA for kids, that wasn’t on the list; just get added to the list. I think this is a really important one.
00:30:31
Brad: What do you do as a former accountant and a meticulous record keeper? What do you do to feel good about how you’re going to validate the fact that this, in fact, was earned income?
00:30:47
Jonathan: There’s not an official way, but there is a best practice that most people should feel pretty good about, right?
00:30:52
Brad: Yeah, agreed. And it does get a little nebulous because, in her case, she made enough money to get over the threshold for 1099 reporting, okay? That’s $600. If you earn over $600 from some employer or whatever, you are going to get a 1099. She’ll get a 1099 probably in the next couple of weeks. I will save that; I’ll scan it and upload it to a drive and make sure we have that for posterity.
00:31:14
Jonathan: That will very easily prove out that I think, yeah, it gets a little more nebulous when, in terms of, hey, did they babysit or mow lawns or something? But I think it would be enough to make an invoice of some sort for them, just a paper trail record. You don’t want to have a giant number that you’re aggregating over time and it’s all just vapor lines on Excel. There should be something plausible that shows the paper trail.
00:31:46
Brad: Got it.
00:31:48
Jonathan: Just create a template; get an invoice template, make a note of the date, amount, and time and put it in there. It’s the same idea. It’s a lot less nebulous, but it’s still the principle and the best practices are there. Same idea with your HSA.
00:32:04
Brad: I didn’t see it on your list.
00:32:07
Jonathan: It was open. I bolded it. All right, but I do use that exact same tactic for the HSAs, where you have a spreadsheet on the cloud linked to a Google Drive or Apple storage, or whatever, and you just create those summaries for the year. It’s a little bit of a pain, but if you’re serious about this vehicle, which we’ll talk about, if you’re serious about this approach, HSA as an investment vehicle, it is worth it to have that documentation. And absolutely, because these numbers are going to get big, fast over periods of time, you want to have a well-documented paper trail.
00:32:46
Brad: Yep, totally agreed.
00:32:48
Jonathan: Another one that I had on the list, since we’re talking about Roth IRAs, is Roth IRA contributions can always be taken out tax and penalty-free at any time. For the longest time, I did not realize, and I didn’t intellectualize what this really meant. It was just word vomit. But it is so important. I think this will let a lot of people more freely mentally contribute to a Roth IRA because all things equal, the argument would be, oh, but what if I need that money? That’s why some people don’t contribute to retirement accounts because they think it’s stuck there.
00:33:30
Brad: Correct.
00:33:32
Jonathan: For traditional accounts, that is true to some degree. We’ve talked repeatedly about, and we will talk in great detail in the future, about ways to take money out of traditional IRAs and 401ks before you’re 59 and a half. But when we talk Roth IRAs, you’ve already paid tax on this money. That’s the whole point. Roth contributions are after-tax money. The nice thing is whatever money you contribute, you can pull out at any time tax and penalty-free.
00:34:10
Brad: That’s very important to remember.
00:34:10
Jonathan: If there’s earnings, if there’s growth on that, that cannot come out tax and penalty-free. But if you put in five grand one year and you have an emergency and for some reason you need money, let’s say that’s where you put your emergency fund, okay? You can pull it out tax and penalty-free.
00:34:24
Brad: Exactly.
00:34:24
Jonathan: We talked about the power of cutting $100 of recurring expenses out of your budget. Last week you made the case that it’s worth $90,000 to you over a period of 20 years. It lowers your FI number by over $30K. That $100 a month invested is worth $60,000 at an 8% annual return. So you put all that together. There’s a $90K swing if you can just find $100 a month to cut.
00:34:45
Brad: Very true.
00:34:48
Jonathan: So here’s a story. This is not revolutionary in that a lot of people have started to hear about MVNO. You have your cell phone service of choice; maybe you’re with one of the big ones, but there are these other MVNOs and there’s a bunch of options. Notably, I am using, and a lot of our community or people that I know are using Mint Mobile. Mint Mobile, I believe, runs on T-Mobile lines in a lot of places.
00:35:07
Brad: Good to know.
00:35:08
Jonathan: They buy allotments from different providers, so you don’t always know. Google Fi, as an alternative, also runs on other providers. I can confirm because I had a troubleshooting issue with Google Fi that they are running on T-Mobile lines, at least in Richmond, Virginia. So anyway, how do you pick between the two? Price is certainly a very important aspect to run on. Mint Mobile is shockingly affordable—probably $15 a month per line with a very forgiving data allowance.
00:35:31
Brad: Nice.
00:35:32
Jonathan: Google Fi, on the other hand, has gotten relatively uncompetitive. They’re close to $60 a month by the time you add in data, etc. They charge you $10 per gigabyte of data, so it adds up really quickly. I was getting bills where I was like, well, am I really saving on Google Fi? Let me give Mint Mobile a shot.
00:35:47
Brad: Sounds reasonable.
00:35:48
Jonathan: Your worst-case scenario, you can actually go back. Most mobile phones these days use eSIMs, so you don’t even have to get a SIM card. You can quite literally go into your settings, toggle it on, toggle it off. You could even have two lines if you wanted to. And by the way, you’re still probably paying less than you would with one of the traditional vendors.
00:36:08
Brad: Exactly.
00:36:09
Jonathan: It comes down to this idea—at some point, I make very few phone calls, but when I do make a phone call, I kind of need to be able to hear the other person. Can you hear me now? You know you can’t be doing that. I’ve tried Mint Mobile in Virginia, and I’m satisfied. It’s maybe not perfect all the time, but it is beyond what I would expect or need from it. The data always works well and the voice signal is perfectly satisfactory.
00:36:34
Brad: Great.
00:36:35
Jonathan: So here’s what it comes down to: Google Fi is incredible for international use. It is so good. Mint Mobile, not very competitive on international, as they quickly charge you for roaming. Here’s what I realized—this is timely for people considering it. I told my wife that I’ve liked Google Fi; I’ve used them for a long time. They’re massively jacking up the rates here, and I just don’t feel like it’s that competitive. We’re going to switch over to Mint Mobile.
00:37:04
Brad: Makes sense.
00:37:05
Jonathan: If we don’t like it, we can go back. We have an international trip coming up—going to Cape Town. I’ve experienced Google Fi in other countries, and there’s nothing like it. They buy contracts in other countries and it works just like you have it there. I set it up before we left, about a week before we left, but I made one mistake.
00:37:22
Brad: What was that?
00:37:23
Jonathan: You can absolutely set up Google Fi for the month that you’re out of town. But if you do it, you need to set it up before you leave. You need to be in the United States when you set it up. And very importantly, you need to start using your data 24 hours before you leave the country. Because once I got over there, we hadn’t used it on my wife’s phone. I had set it all up; I had done something on mine, but we hadn’t switched it over and actually used it.
00:37:50
Brad: Oof.
00:37:51
Jonathan: I called customer support, but could not get them to switch it over. Her phone was dead in the water with Google Fi, even though I had paid and set it all up. This is just one of those little things. You can switch your phone service, and guess what? When you didn’t finance your phone and lock yourself into three years of payment, you have portability and options.
00:38:11
Brad: Definitely.
00:38:12
Jonathan: So just think about that—$15 a month per person. What is the average phone bill these days? Are you tying it into your internet and cable and ending up with a $400 a month monster package? There’s 10% savings there.
00:38:18
Brad: Absolutely.
00:38:19
Jonathan: Yeah, this is such low-hanging fruit. It’s interesting because when I go back and listen to all our old episodes, one of our most popular episodes of all time was 21. It was the pillars of FI. Literally, one of the pillars we made is cutting your cell phone. It was very cute. But it really highlighted the power of these small differences, these small changes.
00:38:36
Brad: So true.
00:38:37
Jonathan: And like we said, every $100 a month—it’s worth $90,000 to you over 20 years. Yeah, this is a perfect example. There are still lots of people who are spending $80 to $120 a month on their cell phone service per line. This is crazy. We’re not in the bag for any particular cell phone company, but I use Mint Mobile and they’re fantastic.
00:39:00
Brad: Great!
00:39:01
Jonathan: It’s $15. I think I get five gigabytes of data. But the important lesson on the path to FI is we are trying to find an optimized way to live.
00:39:10
Jonathan: Now, does this mean that we are like everybody else who’s just freely spending and, oh, if I want it, I’m gonna buy it kind of scenario? No, because we understand there are limitations to life. If we all made unlimited money, we wouldn’t have to make any choices. We live in a world where we have to make choices. And one that I’ve made is, okay, I’m only gonna spend 15 bucks a month for whatever it is, a couple gigabytes. It might even be five gigabytes of data. Frankly, I’m never even close to that. But what that means is I don’t download podcasts and I don’t stream YouTube when I’m outside of my Wi-Fi. That’s it. That’s the only difference I have to make. And frankly, I probably could because I have multiple gigabytes unused every month. So I probably could do that. Maybe that’s even an antiquated thought, but I’m making a tiny, tiny sacrifice, and I’m saving $100 a month on my phone.
00:40:02
Jonathan: So is this the, “Hey, Yolo, the hell out of life”? I can just throw money around like it’s nothing? No, I’m making a very optimized decision, and I’m just giving up this tiny, tiny little thing, and that one decision is going to be worth $90,000 to me. That’s a no-brainer. I have no comment moving on. Let me move on. I’ll move on to one. We’ve done five. All right. We got to keep moving. All right. I got three all at once because they tie together. This is about automating your financial life. I think this is the key to everything. You want to take your brain out of everything.
00:40:31
Jonathan: When it comes to personal finance, you set up every bill you possibly can on auto pay. I can’t think of anything you have to do anymore that doesn’t allow auto pay in some regard. So please automate all of your bills. And most importantly, credit card. You want to make sure we talk a lot about credit cards here in terms of credit cards can be one of your biggest financial tools, but we are cognizant that tens of millions of people get in deep, deep trouble. When it comes to credit cards, this is why Dave Ramsey is so dogmatic about not touching credit cards. I understand where he’s coming from. I think we’re smart enough in the FI community to understand why he does that for the people that he talks to and why our advice is a little bit different.
00:41:16
Jonathan: We can succeed wildly when it comes to credit cards in terms of travel rewards and such. But you have to pay your card on time and in full every single month, or none of it is worth it. The interest-free loan, you get the travel rewards, all the good stuff, the protections. None of it is worth it if you’re paying 25% interest. So please set up your credit card to pay from your checking account on time and in full every single month. Pay yourself first. That’s another really important thing. If you’ve previously spent every dollar that comes in and all of a sudden you listen to ChooseFI and you have a new mindset, it’s all well and good to think you’re going to change overnight, but realistically our brains get in the way.
00:42:04
Jonathan: We want to let our brains off the hook. We want to just set up principles so that things just work. The “pay yourself first” mantra that you’ve heard in personal finance for decades genuinely works because the money is gone. Then you can freely spend whatever else is left, but that’s it. You can’t get into trouble because you’ve already saved your 10, 20, 30, maybe more percent of your income because it’s just getting sent to where you need it to be sent, whether it’s your IRA, your 401(k), traditional savings, whatever it is, it’s happening automatically in the background.
00:42:28
Jonathan: So that’s my talk: pay yourself first, automate everything, pay your credit cards, don’t let your brain get in the way. Yeah, you could very easily now shift this and now talk about getting your brain out of the way on the investment side either. And I’m going to stagger or just run barrel my way through a couple of these to put them together. The fees matter, the fees matter. So we have on here, you know, just, are you aware if your mutual fund or your advisor has you in funds that have a 1% fee?
00:42:52
Jonathan: And then they’ve got some sort of fee on top of this? Are you aware of what the cost of those fees are to your portfolio balance over a period of 20 or 40 years? Do you realize how that compounds if you were to have a 1% fee, whether it’s coming from your advisor or coming from the actual funds that they have you in versus having the same result in a fund that didn’t have any fees? It’s cutting your portfolio in half over an investing lifetime. It’s a traumatic amount of money when you look at it through that lens. So the fees matter.
00:43:27
Jonathan: Now, next to that, it’s very easy and simple. And I feel like when I say, you know, Brad, I promise we’ll come back to this one and we’ll do the math on that for you. We have a whole episode back; Brad, you have the note on what episode we did that on. I don’t, but I actually just pulled up a compound interest calculator to do it. On the example, I was thinking we were going to go ahead and knock out three or four. This was, you’ve just cut my barrel out from underneath me, but go for it. Let’s be correct here. It’s a big one. I mean, it’s a game-changing epiphany here. It’s a really important one.
00:44:01
Brad: So, okay. What I did was really simple. We use an 8% annual return here at ChooseFI as the back of the envelope. What we anticipate now, obviously some years are more than that. Some years are negative. We can never know exactly what the growth will be of the stock market, but over the long haul, 8% is what we use. So I said, this is a 40-year investing lifetime, and you put in $1,000 a month.
00:44:23
Brad: Okay. Now that sounds like a big number to a lot of people, but really you make a hundred grand between a couple or even a solo person, $100 a month is a 12% savings rate. So that’s, that’s a lot of people in the FI community. Many multiples of that. So I basically said, all right, look, we expect an 8% annual return, but when you invest in something like VTI or VTSAX, there’s a couple of hundredths of a percent, tiny, tiny, tiny little bit of what’s called the expense ratio, the underlying expenses.
00:44:51
Brad: So I said, okay, let’s say it’s four one hundredths of a percent. So the best return you could get is 7.96%, somewhere in that vicinity. Okay. So, Jonathan, if you put in a thousand dollars a month at 7.96% annual return after 40 years, you have $3.4 million, not bad. That sounds good. So that’s not too shabby, right? That’s if you save 12%. Okay. So most of us in the FI community are going to have three and a half million dollars, okay? Which is pretty cool in and of itself.
00:45:20
Brad: Now, like you said, if you go to a, an advisor who charges you a 1% fee, which sounds like nothing, they charge assets under management; it’s AUM. So 1%, but they’re not going to put you in VTI or VTSAX. They can’t; how could you say, “Well, I’m just going to put you in the same thing as everybody else?” They have to be more creative to justify their brilliance and, more importantly, their fee.
00:45:45
Jonathan: Exactly. So they try. And even though we believe there are no mutual funds on earth, actively managed funds that are going to beat the market over 40 years, I think it’s a fool’s errand. But like you said, it’s about incentives. So this person has to convince you that they are brilliant. So they’re going to put you in a fund that has something akin to another 1% fee.
00:46:05
Jonathan: So that means your 8% market return now goes down to 6%, right? So you’re getting a 6% annual return. You’re still putting that $1,000 in a month over 40 years. Instead of having $3.45 million, you have $1.99 million. I threw out, I was going to cut it in half, and I remembered those numbers. They sat with me and it was raw and it was painful, but I wasn’t a hundred percent sure if that’s what your calculator was going to say. That’s crazy.
00:46:30
Brad: It is almost, almost half. That is unbelievable.
00:46:35
Jonathan: So the key here, the incremental gain is fees matter, and they matter a lot. They just matter. And Brad, you know, it also ties to what you just said earlier about how you just need to automate things. Here, I want to point this out. All of us have this feeling about what the market’s going to do over a period of time. But also as we get more and more money, that’s sitting on the sidelines that we could invest, we get more and more anxious about which point should we go in?
00:47:01
Jonathan: So getting your brain out of the way and thinking about horizon is so much more important. Horizon and fees are so much more important than when you go in with your bag of money. And I’ll give everybody an example. It should be crystal clear in all of our minds, COVID happened, right? And there was just this crazy fear around what was going to happen at any given point. And there were people that probably called it right and people that called it wrong and maybe regretted at the point.
00:47:29
Brad: Exactly.
00:47:29
Jonathan: My point here is now, all right, it’s now 2026, and you’re sitting on all this money that you’ve had on the sidelines this entire time waiting for the quote-unquote market to drop so you can find a big opportunity. You could go back and find the worst day to invest in the market, you know, back when, right before COVID happened, and you’d still be thrilled with that choice and you’d rather have the money invested then than where it is now. Time really matters here.
00:47:53
Brad: Definitely.
00:47:55
Jonathan: And it’s so easy to get caught up in, “Oh, what’s the right day? Should I do it at the beginning of the day? Should I do…” People much wiser than me have said and quoted, “Time in the market is so much more important than timing the market.” And the problem with winning, when you time it once and nail it, is you start to think that you are really good at this. And we only get one life.
00:48:22
Jonathan: It’s only when you look back that you realize, “Wow, I, uh, okay, got the wind there,” but it would have been real easy just to take my brain out of it. And I would have been, you know, $3.45 million, you know, just based on stupid math and investing over a long time horizon. That’s just the reality of this. Nobody keeps up with the market because their brain gets in the way and they want to pick the right day and the wrong day, and you get it right once or twice, but you don’t stay that way over an investing horizon. Very, very, very few individuals over a 40-year period can do that, and it’s not your advisor.
00:49:03
Brad: Yeah, Jonathan, that’s clearly the massive impact for fees, but there are fees everywhere. There are convenience fees, bank fees, ATM fees, overdraft fees, all sorts of fees. If you’re paying fees in any aspect of your financial life, unless you’re very purposely, right? Like I pay a one or two annual fees on credit cards that I have very specific reasons to do. Like I might get a free night certificate from my Hyatt card, or I…
ChooseFI
00:49:28
Brad: I might have a couple hundred thousand Chase Ultimate Rewards points. I keep my Sapphire Preferred card open. I’m doing that with eyes wide open and very intentionally. If you are paying fees anywhere in your financial life, it probably means you’re doing something wrong or you’re just being lazy, frankly. If you’re getting ATM fees, I don’t know who needs cash in this day and age. If you’re paying ATM fees because you’re too lazy to go to your bank and do it, I mean, come on, seriously, like if you’re paying overdraft fees, any of these convenience fees, what does a convenience fee matter?
00:50:00
Brad: Even down to individuals in the FI community, we have assets. We don’t have to worry about cash flow. I’ve noticed that sometimes my insurance company charges me a monthly fee to pay with a credit card. So I just simply asked the question, “Hey, can I pay this annually and only get hit with one of these small fees or can I pay annually with a check and not have to pay a fee?” And the answer was yes, of course you can. I think you’re right about the outcome, but I would suggest that the solution can be a little bit more creative.
00:50:40
Brad: I agree with your point that I’m not going to pay fees. I’m going to die on the hill of trying to find ways to avoid fees, especially to a banking institution that’s making money by holding my money. You get to hold my money, so I’m not going to pay you fees for that privilege. With that in mind, what are your options? Well, you could go to your bank, absolutely, but online banks are desperate for your business. They don’t have physical locations and they’re all competing for your money. You should look online at a bank that offers online checking accounts, if that meets your needs.
00:51:22
Brad: For example, USA offers up to $25 a month in ATM fee reimbursement. I’m having a personal grudge match right now with my bank because they want to charge me for checks. I need checks for a few transactions, particularly for charitable donations. My bank wants to charge me. They say, “If you have a checking account with a $20,000 average balance per month, we won’t charge you.” Or you can pay us $36 for a hundred checks or whatever the number is. This is madness.
00:52:10
Brad: You got to decide the level of friction. I usually can just go and have a conversation and get the outcome that you suggested, where they’re perfectly willing to comp you checks this one time. Alternatively, you could go find an online account that has a checking offering and gives you unlimited free checks. Just take advantage of the fact that banks want your money. To me, it doesn’t seem logical to store lots of money in a checking account making 0.01% interest.
00:53:03
Brad: The fees work against you, but they should also work for you in terms of interest. If you need to have an amount of money in an account, I wouldn’t be comfortable leaving it where it makes 0.01% interest.
00:53:13
Jonathan: I totally agree with that. A slight addition and maybe counterpoint would be that I leave a couple thousand dollars extra in my checking account to mitigate my stress. I think this is one of the beautiful things about personal finance. Everything should pass the “sleep well at night” test. I don’t want to deal with, “Is my electric bill coming out on the 14th? Do I have enough money?” So, I leave a little extra buffer in my checking account.
00:54:04
Jonathan: I’m doing 20 to 18, five for a day. If they’re hitting you with five bucks a month, well, that’s crazy. Just in general, I agree you’re softening my stance. You should try to optimize whatever money you have sitting on the sidelines.
00:54:15
Brad: That’s another countercultural concept we’ve discussed: the emergency fund. We had BiggerPockets on a couple of years ago to talk about this specifically, arguing that we don’t need the massive emergency fund in the traditional sense. Many who have financial issues to get to a couple thousand dollars in net worth is significant.
00:54:36
Brad: We aren’t arguing against that; we’re just talking specifically about people on the path to FI. Many have increasing amounts of assets and we’re going to be wealthy, right? Many of us have a hundred thousand or more in assets. Now, if my annual expenses are $60,000 a year, six months of expenses are $30,000. Do I need $30,000 sitting in a checking account or even a high-yield savings account doing nothing? No, I don’t because I have assets.
00:55:17
Brad: There are very few things short of a ransom note that you need a lot of cash for in a couple of hours. Basically, in this day and age, you can transfer money in one or two business days. Our argument is you can invest all your money above that threshold. I keep five to $10,000 in my checking account just to sleep well at night. But you could put less than that if money is pouring in from your W2 job, but above that, if I have money sitting in my investments for an emergency, I can just sell those investments and transfer the money over.
00:56:30
Brad: It’s an interesting rethink on the traditional emergency fund. It used to be about saving this money and having it just sit there, making you feel safe. But now, we have assets that are growing every month.
00:56:44
Jonathan: This ties back to the Roth IRA. You can get your Roth contributions out anytime without being 59 and a half. Once you know where your emergency fund can go, there is a lot more flexibility than you might have considered. If you have $30,000 worth of contributions in your Roth IRA, congratulations if you don’t have an emergency fund and are relatively early in your journey, you’re winning.
00:57:13
Jonathan: If you do have an emergency and that money in the Roth is your only free cash, you can access your contributions without penalties. It’s misguided to say that money’s locked up in retirement because it can be accessed before 59 and a half.
00:57:25
Brad: All right, I’m going to admit defeat. We had a goal of getting 100 things mentioned. That was maybe an unspoken goal. We made it to 14 or 15. If it was just us quoting a list without commentary, that would be mediocre value, but I’m finding this very informative.
00:58:04
Brad: I am open to doing another round of these. What do you think?
00:58:08
Jonathan: Let’s do it.
00:58:09
Brad: Okay, everyone, we will be returning at the same bat time, same bat channel, and we’re going to do a financial…
00:58:15
Jonathan: Did that land? Does anyone remember the 1960s Batman television series? Just making sure.
00:58:22
Brad: We’ll be back at the same time next week, diving deeper into things you just don’t know that you don’t know. We thought we were just going to list them. I didn’t totally believe Jonathan, but I’m actually pretty happy with the depth we’ve covered. Let us know if this works for you and if you’re enjoying the show.
00:59:00
Jonathan: We had a bunch of contributions for our goal setting for 2026. We’re going through the process of listening to those and building our episode around it.
00:59:13
Jonathan: That’s going to be rolling out in the next couple of weeks here. So that is now closed, but we are going to be featuring segments and we want to feature you on these segments in many, many episodes to come, and so there are two segments, it’s going to always be open, right? It’s all, no matter when you’re listening to this, we want your feedback. We want your voicemail. And the two segments that we’re announcing right now, and they’re probably not a surprise, but hopefully they’re exciting, are Frugal Win of the Weeks and Life Hacks.
00:59:36
Brad: Yeah, Jay. So good question. I actually highlighted one of these a couple of weeks ago on our first episode back that came out at the beginning of this month, where it was just something simple. It was, Hey. I have these element electrolyte packages every morning, and I actually found a way, instead of paying $1.50 to them per package, which was crazy for some salt, magnesium, and potassium, to make it myself at a cost of a couple pennies. That’s something really simple, and it was just like a fun, fun win.
01:00:21
Brad: I think that’s what we’re looking for. Like, another one that I’ve got, which is I’m in this walkable community now, and Whole Foods is actually here in the community. It’s a five-minute walk down the road. On Tuesdays, they have buy one, get one on pounds of ground beef. So, I literally put, and this is another life hack, and this actually ties into life hacks, is one of my longstanding life hacks is I use this app called Todoist, so T-O-D-O-I-S-T, and basically, I put my entire life in this Todoist. I have outsourced my entire brain to this. Jonathan, I kid you not. I have a recurring task on Tuesday, which is go to Whole Foods for buy one, get one ground beef, and it’s just a nice little way. I can go anytime. I can be lazy. I can go whenever, or I can just go on Tuesday when they have the sale. This was just a cool little frugal one of the week.
01:01:49
Brad: So, along those lines, up to massive things. It doesn’t have to be minuscule like my tale. It can be something significant. So, maybe that gives a little flavor for both frugal wins of the week and life hacks. There are hundreds of thousands of you listening to this podcast. You have so many incredible things that you’re doing in your lives. Let’s share them. This is the ultimate crowdsourced personal finance show. This is what it’s all about. It’s not limited to me and Jonathan. It is expansive. It’s all about you. Send these things in. Send what you’re doing in. We wanna talk about them. We can bomb through these life hacks. We can talk about dozens of them, or maybe five or 10 since you and I all bogged down with all our commentary.
01:02:42
Jonathan: But that’s the cool thing. These are forever. These are evergreen. We’re gonna talk about them, hopefully, on just about every episode. We’ll pass along a frugal one of the week and a life hack. Someone’s like, Brad, Jonathan, can you just get out of the way? More of the information. I don’t need all the editorial. I’m just telling you it’s just what we do.
01:02:59
Brad: Oh, come on, it’s good stuff. So, how does someone submit this?
01:03:06
Jonathan: Yeah, absolutely. So, Brad and I have been racking our brains for what intuitive looks like. This is something Brad’s heard me say. Intuitive, it doesn’t come easy. It’s earned over time. And so, we have decided this is the path forward. You’re just gonna go to choosefi.com/login. It’s that simple, right? If you wanna be a part of the community, you need to be a part of the community. So, you’re gonna do that, and you’re immediately gonna have a dashboard. And at the top of your dashboard, it could change over time, but a version of calls to action, right?
01:03:36
Jonathan: How are you going to take action each and every week? And also, be a part of the podcast. How do you wanna, do you want to contribute to the podcast? So, this top dashboard item that will show up as soon as you log in will be your gateway to contribute to the show or to do something based on something you heard on the show. We just wrapped up our goals where people shared with us their goals for 2026. We’re putting that episode now, but right in that same area, you’re also gonna see the option to leave a frugal win of the week or to leave a life hack.
01:04:07
Jonathan: So, a life hack is a super broad, expansive thing that can cover anything you really, you know, you want that you just think other people need to know about. For me today, I just was letting you know, hey, you may not be Google Fi year round, but if you’re doing international travel, they are really, really good for international travel, but make sure you use it the day before you leave the country to make sure that you don’t have any issues on the other side. But you might have one about a very niche scholarship opportunity that had something to do with being a caddy at some school in the Midwest. We’ve had these before and they have provided value to many, many thousands of people over the years. So, you know, if you have something you haven’t heard us mention on the show and you think we need to be aware of it, we want to bring you in and we want to feature that information.
01:04:49
Brad: Absolutely. And we will certainly be adding additional segments. So it’s not just going to be limited to those two, but that’s what we’re rolling out right now. So yeah, choosefi.com/login. This also doubles as the local group. So whenever you want to log into your local group, when you create an account, you will get email invites for all the local group events, which is absolutely critical.
01:05:09
Brad: We have been hamstrung by Facebook for eight or nine years now, where only a tiny percentage of people, thanks to their ridiculous algorithm, get notifications. Now you get an email notification of every local group event. Jonathan, we’ve seen 30 to 50% increases in local group attendance since admins have started using your platform. And it’s really, really remarkable. If you don’t, for some reason, remember choosefi.com/login, you could just go to our main homepage, choosefi.com. In the upper right, there’s sign in. You can go there. That doubles as the same thing, but just really simply, if you wanted that, nice simple thing, choosefi.com/login.
01:05:46
Brad: All right, my friends, the fire is spreading. We’ll see you next time, as we continue to go down the road less traveled.
[FINAL TIMESTAMP] Podcast Extro: You’ve been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time.
