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
Brad: Hello and welcome to ChooseFI. Today on the show, we have a fun one. First, we have our first ever Where Are They Now segment. So we bring back Andy Hill, who was a guest in episode 68. It’s such a fun look at the last decade where his life has taken him; him and his wife, Nicole, have built something extraordinary. But it’s never a straight line, and I think that’s what’s fantastic. If you’re looking for how do I get my spouse on board, both ways, I think you’re really gonna like that and you’re gonna get a lot out of what they’ve been up to and what they’ve been able to build for themselves and their family.
00:01:27
Brad: I also start the episode with a whole bunch of life hacks. We talk about the success of FI101 in our St. Louis group and Second Generation FI. We had David’s son take notes during the event just on his own volition. It’s really neat to see the order of operations of investing that he talked about. I also go into building a perpetual money-making machine. The fact that you were going to be a millionaire—that’s what compounding does—and that there’s no secret. There’s no person behind the mask or behind the curtain that’s gonna help you get to FI or help you learn some secret of investing. That’s the beautiful part. This is the simple path to wealth. This is we’re not selling you anything. This is just you taking action day after day to build an extraordinary life, both financially, but more importantly, in all the ways that matter. I think you’re really gonna enjoy this episode.
00:02:22
Brad: All right, welcome to ChooseFI. I’m excited to have a rare solo episode today. I’m actually recording this on February 9th, and we’re getting set for our big live event here in Richmond, Virginia. I just picked up Alan and Katie Donegan from the airport last night and got to hang out with them, which is great. Watched a little bit of the Superbowl, and yeah, this should be fun. I think these live events and just getting together in person, I know we talk about this really often here, but it just matters. It’s amazing to see what’s going on all across the country and across the world in our local groups.
00:03:02
Brad: We actually had St. Louis, which is an absolute rockstar group. Kristen Knapp has completely revitalized that group. They had 70 people show up for FI 101. It was a presentation that Alan and Kristen did there, and it was just remarkable. I actually saw a Facebook post and this was a guy named David posted. He said, “Alan Hansen, this was my son taking notes tonight.” He even underlined “invest” and said, “hashtag second generation FI.” This is a picture, a spiral notebook from elementary or middle school. David’s son wrote, “save and invest the rest,” and he had the financial order of operations. His big question was, “where does my next dollar go?”
00:03:59
Brad: He took notes from this presentation and it was: 1. Start with a small emergency fund. 2. Get your 401k match. 3. Pay down high interest debt. 4. A bigger emergency fund. 5 and 6 are basically maximizing your tax-deferred and retirement account—Roth IRAs, 401ks, HSAs, et cetera. 7. Taxable brokerage. 8. Prepaid future expenses, which is a really interesting one. 9. Pay down low interest debt. This order of operations is really interesting, and I love that they started with a small emergency fund. A lot of us get bogged down in the traditional financial media about needing to squirrel away a year’s worth of expenses or six months’ worth of expenses, which can be $20,000, $30,000, or even $80,000, something like that, and you’re not investing that along the way.
00:05:05
Brad: I think that’s something we’ve talked about here; having a net worth is critical, but having this money just sitting there doing nothing as an emergency fund doesn’t really make sense—not in this day and age when if you were invested, that money could still be sold at any given moment and transferred back over to your bank. It’s in your bank account in one, two, or three days and all is well in the world. So clearly, we’re not saying don’t have a net worth; just rethink the emergency fund in terms of how much money you need sitting there idle doing nothing.
00:05:34
Brad: My friend Gwen was in the audience there, and she sent me a picture of the 70 people watching this event. It was just really, really impressive. We’re going to start rolling out, and we’re actually going to use their presentation and give it to admins of every local group in the world. So if you’re looking for FI 101, ask your admin about it, and we can make that happen. That’s what’s so wonderful about having this worldwide community; we can share resources. Alan and Kristen put something together amazing, and you can be part of it. Just make sure you sign up.
00:06:13
Brad: I think, I haven’t done the greatest job with this. Jonathan and I have talked about all the amazing things that he’s building, but really just very simply, all we need you to do right now is just sign up and do nothing else. Sure, if you wanna get in there and talk, you can, but it’s really not that important right now. If you sign up, just go to chooseabout.com/local if you haven’t signed up yet or just chooseabout.com/login if you have. Put your email address in, pick your local group, and sit back, and you’re gonna get email notifications of every local event that’s happening in your area. We’re not stuck with Facebook anymore.
00:07:19
Brad: I really wanted to highlight this because I love the second generation FI thing. I love that people are coming out to learn about FI, and we can all get better together. Going back to picking up Alan and Katie, I wanted to do a couple of random little life hacks. Sometimes I do things in my own life that I don’t know if everybody knows about, so I’m just gonna quickly bomb through a handful of these. First was, again, I picked them up from the airport yesterday, and I am fanatical about tracking flights.
00:07:57
Brad: I just go to flightaware.com. You can go to their homepage, pick flight tracking and then flight finder. This is really cool; it’s a GPS tracker of every flight in the world. You can actually track not only the flight that you’re on— which frankly doesn’t do much because you’re on the plane, you know if it’s late or not—but you can track the incoming flights. Just put in your airport, put the airport you’re going to, or just the flight number. When you click on that flight, you can click “where is my plane now?” If that plane hasn’t taken off, you just click “where is my plane now?” again.
00:08:42
Brad: You can track back on where that flight is coming from and see if there are any delays. I do this pretty often to determine when I need to get to the airport. Sometimes it looks like my incoming flight is gonna be delayed if I have a connection or some such. It’s really convenient. Again, I’m a little fanatical about it, so take it for what it’s worth, but I think this is really, really convenient, and a lot of people can get value from this.
00:09:05
Brad: Another couple random life hacks— I was listening to an old episode and a friend of ours named Noah, who used to have a website called Money Metagame, mentioned buying discounted gift cards. I think this is something that a lot of us are totally unaware of. He talked about a site called Gift Card Wiki, and it still exists. I don’t know if that’s the best gift card site, but you can Google “buy discounted gift cards,” and I think there are sites like Gift Card Granny and others.
00:09:53
Brad: Let’s say you’re going to a store to purchase something. Very often, you can buy gift cards for a discount; it might just be 5%, or frankly, it might be 10%, 20%, or even 30% if it’s a more obscure store, or something that people want to unload their gift cards on. You’re not going to get a 30% discount on Amazon, of course, but sometimes you can get 3%, 5%, or 7%, which isn’t terrible. That’s a really nice life hack, especially as you’re about to buy something.
00:10:29
Brad: I don’t necessarily say go randomly buy thousands of dollars of gift cards in stores if you’re not 100% certain you’re going to buy, but Noah talked about literally being in a store, getting ready to buy something, and as he was walking to the counter, he went to Gift Card Wiki and bought the gift card for the item he was going to buy five minutes from then. That’s a really cool one.
00:10:49
Brad: I mentioned a couple of things in my newsletter recently. If you’re not getting my newsletter, basically, we have three things going on here at ChooseFI: this podcast, which obviously you’re listening to, my newsletter that goes out every Tuesday—it’s really short, but I think it’s quite high value—so choosefi.com/subscribe. The third thing, of course, is that local platform. You can get notified of local events.
00:11:25
Brad: I mentioned that, unfortunately, I almost got hacked with my email, which I have almost impenetrable email passwords for, and I have two-factor on everything, so I’m pretty secure. But somebody was trying to log in, and it got triggered. It was an old email address of mine through Microsoft. I kept getting these two-factor requests to approve or deny, and luckily, I was able to deny them. There really wasn’t ever a major concern, but nevertheless, it made me realize that email is one of, if not the biggest, attack vectors for most of us.
00:12:06
Brad: It’s something that we type in fairly often; a lot of people don’t have secure passwords, which is a real mess. If you think about it, most of your financial accounts and services and credit cards and Vanguard and your bank, the password reset goes to your email address. That is a major security risk, especially if you don’t have a secure password and don’t have two-factor authentication. This is something that you really, really, really need to lock down.
00:10:01
Brad: I think all of us should have a password manager. I know one that a lot of security experts recommend is Bitwarden, and you definitely want to Google that directly, make sure you’re going to their official site. That’s something where they can help you create really almost impenetrable passwords and save them. You just need to remember your master password, and that is a massive security way to increase your likelihood of getting attacked, let’s say.
00:10:27
Brad: So, I actually, after this happened, reached out to my friend, Tom, who is a former FBI special agent and expert in cybersecurity. He was actually on the podcast a couple times, episodes 515 and 397. I asked him what I should consider doing about this, and he said that there are a lot of two-factor authentication methods, but there’s a physical device called a YubiKey, so it’s Y-U-B-I-K-E-Y, and he highly recommends it. He says to use that wherever possible.
00:10:55
Brad: I’m going to quote him regarding email addresses on essential accounts. He said, “I use a specific ProtonMail email address for all my financial stuff. Nothing else uses that email, and for that and my Gmail, I have them tied to my YubiKey, and then I have an old email that I use for unimportant things.” So, basically what he’s doing is opening a new email address that is solely used for these essential logins. Don’t put newsletters on there. Don’t put even like your frequent flyer mile or something, just the absolute essentials.
00:11:28
Brad: Some other people responded to my newsletter and said another thing you can do is put an alias in, which Google has alias ability as well as ProtonMail. You can literally make not only the email address, but make it very specific for each individual account by just adding a plus sign. It actually doesn’t undo your email address. You can add email address plus, and then whatever, Vanguard, or plus Wells Fargo, or plus Bank of America, whatever it is. It allows you to basically have a unique email address for each one, but it’s still tied to that one email address.
00:12:08
Brad: Another nice security option that someone else wrote in for me is called Google’s Advanced Protection Program. You can put this on your Gmail, and this is something that Google has added as a benefit. It’s pretty easy to set up and basically makes your email not hack-proof—nothing’s hack-proof—but this is something a lot of us have Gmail accounts, so I would highly recommend Googling that.
00:12:37
Brad: Quickly rounding out the little life hack addition here, annualcreditreport.com is something that I feel like a lot of us should know. I know most of us can get our credit scores for free through our banks. I know Capital One offers this with the credit card that I have, and it’s all well and good to get your credit score, but you actually want to check your credit report as well. The three main credit bureaus are Experian, TransUnion, and Equifax. If you go to annualcreditreport.com, you can get these credit reports absolutely free.
00:13:02
Brad: There’s some ambiguity here. It used to be that you could get one of each of these reports for free every 12 months. Federal law allows this. So, this website appears outdated, but it’s legit. This is part of that federal law that allows you to get a free credit report every 12 months from each of the three reporting companies. What I would do is make recurring tasks for checking my credit reports every four months.
00:13:31
Brad: I have a task list app called to-do-ist, and every four months, I check my credit report. For example, check Equifax report every January 1st, check TransUnion every May 1st, et cetera. I had an issue where someone opened a credit card in my name, but I was able to shut it down before anything happened. I froze my credit score, which was really easy.
00:14:06
Brad: Now, it seems that these credit reports are possibly available as frequently as every week. It looks like it might be available more often than once a year from each of the bureaus. But at the very worst, it’s just log in every four months, get the next one, and do a quick glance at your credit report to see if there’s any issue.
00:14:39
Brad: Like I said, finally, that to-do-ist app has transformed my life. It is absolutely mentally freeing. I use it for everything, even down to charging my electric toothbrush every month or every four weeks. I have tasks for every little thing—groceries, a running grocery list, even renewing my passport, which only happens once a decade. When everything is out of your head, you are mentally free in a way you almost cannot imagine.
00:16:02
Brad: I highly recommend to-do-ist. The app is free to use at first, and while there’s a nominal fee if you want to add a few features, I don’t even know if they’re worth it. So those are my life hack additions for the day, which hopefully have some value. I wanted to talk about a little interaction I had in real life with one of my good friends.
00:16:30
Brad: He’s been pursuing the path to FI kind of outside of the FI community, but he’s reached FI. He was talking about investing. It’s easy to get bogged down, to think there’s some secret knowledge you don’t have. It was fascinating because I was listening to an old episode with J.L. Collins about the simple path to wealth. Since then, he’s sold well over a million copies of his book.
00:17:09
Brad: J.L. Collins said, “Look, if I thought there was some secret, if I thought there was a way to improve my return, I would do it. The difference between an 8% return and a 9% return when compounded over 30 or 50 years is enormous.” There is nothing to suggest that there is some secret, and net of fees, it makes it almost impossible to beat the market.
00:18:00
Brad: I told my friend, “If you want to take 10 or $20,000 and just play around, think of it as education.” For him, being at FI, that kind of money is not going to make a significant difference. Keep in mind that the only term that matters is the long-term.
00:18:15
Brad: People often look to find some secret to beat the market, which is unlikely. There are people who claim to have secrets for decades, but it’s just hard to do. Even someone like Michael Burry, who correctly called the big short, still struggles to get it right every time.
00:19:00
Brad: It shows how difficult it is to beat the market. People should realize the best approach is to focus on building wealth through consistent investing. You are going to be a millionaire. Building a perpetual money-making machine is what FI is about. You’re creating an asset base that generates money for you every year, doing no work. That’s remarkable.
00:20:13
Brad: Which is reasonable for a family, even a single, certainly, in this day and age, but even just saying a very middle-class income, two people making $50,000 each, and they have a 12% savings rate. I think a lot of us, if you check out Mr. Money Mustache’s The Shockingly Simple Math Behind Early Retirement, you can see what really it looks like when you have a FI savings rate of 30 or 40 or 50-plus%. But even just on $100,000 income, you save 12%, right? So $12,000, this is on the gross income, you save $1,000 a month, right? Throw that into a compound interest calculator. Throw in, for 30 years, at an 8% return, you’re saving $1,000 a month. Your net worth is $1,500,000, $1.5 million, okay? You save $0 from there on out, that money’s gonna double every nine years. Nine years later, at 39 years in, you have $3 million. Then another nine years later, you have six million. I mean, this is absolutely crazy. That’s what we’re talking about here. That’s a 12% savings rate on the gross income on $100,000 income, which I think a lot of couples can really do.
00:21:26
Brad: And you start getting into FI savings rates, you talk about 30%, you talk about 50%. Fifty percent is more than four times this. So you’re talking an enormous, enormous amount, right? $4,000 a month, I’m plugging this in. Yeah, obviously, the math is pretty simple. It’s $6 million after 30 years, it’s $12 million after 39 years. These are real, real amounts, okay? You are going to be a millionaire, that’s what we’re doing here. This compounding is gonna work in your favor. You’re building something remarkable, okay? And don’t ever lose sight of that. We are doing something remarkable here in the FI community.
00:22:02
Brad: And really, you’re putting in, in most cases, about 10 years, 10 to 15 years of concerted savings. And you are making every subsequent day of your life easier and better. That’s what you’re doing, okay? This is not just playing around. You are transforming your entire life, transforming it. Think about how fast a decade goes by. Think about the last decade. It blinked by. So I would posit that the next decade for most people is going to blink by. And for people who are saving nothing, they’re gonna wake up 10 years from now, they’re gonna have the same negligible net worth, and they can’t get that decade back. Or you can follow the path to FI, you can save, and you can transform your life forever. And maybe make it generational. It’s not hyperbole.
00:22:56
Brad: And that’s the thing, again, nobody’s selling anything in the FI community. This is the simplest thing ever. It’s live below your means, it’s save money, it’s invest in low-cost funds and ETFs, something like VTI is what I put all my money in, Vanguard’s total stock market ETF. And again, I’m not trying to sell you a secret. There is no secret, there’s nothing. It’s just that, it’s live below your means, it’s try to build an extraordinary life, it’s experiment, and play around, and have fun, and spend time with people you love, and learn new things. How can that be anything but an unmitigated good? It can’t be, it just simply can’t be.
00:23:35
Brad: Our upcoming guest here, I actually am doing the first ever Where Are They Now segment. So this is Andy. Andy was on episode 68, way, way back, seven plus years ago, in 2018. And he taught Financial Peace University classes, really him and his wife, Nicole, got on board. And it wasn’t a straight line, as he’s gonna tell you. They certainly had some issues, and they worked through them and FI helped make them stronger. They had these budget parties every month, and really built a life together. And if you want a story of where your life can go in a decade, I think Andy’s story is really gonna be interesting.
00:24:20
Brad: So I’m very excited to bring this to you. So this is our first ever Where Are They Now segment. All right, so we’re trying out a fun new segment called Where Are They Now. And way back in, I think it was March of 2018, episode 68, I had my friend Andy Hill on. And the episode was basically, Financial Peace graduates, what’s next? And this was a really fun episode where Andy talked about getting his wife, Nicole, on board, and their budget parties that they had, and lots of just different, interesting aspects of the beginning part of the journey to FI, when it was just the two of them trying to figure it out, trying to talk about their dreams for the future, trying to work together. Their entire lives were ahead of them, which is so amazing. And where is FI gonna take them? I think this is one of the fun parts about having a podcast that’s lasted nearly a decade now, is we can touch base with people.
00:25:16
Brad: So this is now almost eight years later to the day since we recorded it. Andy Hill, welcome back, my friend. This is awesome.
00:25:19
Andy: Thank you for having me, Brad.
00:25:20
Brad: Yeah, it’s been quite a while, and there’s a lot that’s happened in eight years. Well, let’s hear about it. So yeah, like I said, this is an experiment. So I’m just gonna start with the hard-hitting question of where are they now? What has happened in the last eight years?
00:25:33
Andy: Oh my gosh, yeah, I would say around that time in 2018, we were right in the thick of it, man. This was actually probably one of the more difficult years in our marriage. This was at the time where I was super excited about a side hustle that I was building. I had two kids at home, so this would have been a six-year-old and a four-year-old. And my wife was doing the full-time stay-at-home mom thing, which could be, it sounds cushy to some people who aren’t doing it, but it’s a lot of work, and there’s a lot of detail that goes through it.
00:26:06
Andy: So what I’m projecting here is a high-stress year in our marriage, and it became one of those things where we continued to meet every month for our budget parties and talk about our finances and move forward. But it was also one of those points where we’re saying, what do we wanna do going forward? What do we wanna do? We’ve done some cool things. We just shared with Brad that we just paid off our mortgage and we have completely paid off all of our debt, things like that, but really, what is next? And for us, we were trying to figure our way to financial independence, and it was a lot of conversations that became contentious in our relationship based on what I was interested in versus what she was interested in.
00:27:03
Andy: Ultimately, a lot of those conversations, because they became so heated, led us to marriage counseling, which was actually a blessing. It was one of those things where, at the time, I felt a little bit like a failure. How could I let this happen? I’ve got so many good things going on in life. How can I put my marriage to the side? But marriage counseling ended up being a fantastic thing for us that year in 2018. Following this interview, and it really pushed us in a direction of, what is a good middle ground for our relationship where I can find some sort of relief from this corporate career that I don’t like, where I can see my kids more, where I can spend more time with my wife that’s quality, not just in passing, and my wife at the same sense. Where can I feel not so pinched every moment for everything we wanna do? I wanna get out of this house and have some more fun too. I wanna experience some goodness with you. Where can we find this middle ground? And that’s where we were launched in 2018, 2019.
00:28:20
Brad: Wow.
00:28:21
Andy: Yeah, and that is, I know I can speak from personal experience, that is a place that many of us find ourselves. And on the one hand, there are a lot of aspects where, like you embedded in there, they seem like these absolute, unmitigated, wonderful things, right? Like, I get the privilege of staying at home with my kids. Or, I know we talked about this on your podcast that’s going live about the same time as this, is I get the privilege of staying at home from work. At some point. I think we both eventually left our jobs. And that sounds great, but nothing is great just in a vacuum. You have to work at it and you need to be intentional.
00:28:58
Andy: And I think these things that sound great, it doesn’t necessarily mean it’s gonna be perfect for you. And I think what you said in there was, what’s a good middle ground? And what are our hopes and dreams together? What are our hopes and dreams individually? Which is important also, to remember that you are individual humans. It’s okay to have individual hopes and dreams as well, together and with your kids and et cetera. I think these things are important.
00:29:29
Brad: So obviously, right, you’re describing this difficult year, but obviously the punchline is, eight years later, you’re still together?
00:29:34
Andy: Absolutely, yeah, we’re still together, but it was that moment that really kind of pushed us to figure out what we wanted together. And I think that coming out of that, it led us to say, okay, what is our version of financial independence that might not be the prescribed version that we’ve read about online or heard about? What’s our version? Okay, well, there’s a lot of different versions out there. We really like this version of Coast FI. We’ve gotten to a point where our investments can grow without any further support. We are mortgage-free. And could we take ourselves off the gas a little bit with regard to the savings rate? And that will allow us to pursue things that would provide us more happiness in the now, as opposed to continuing to grind to try to get somewhere that might provide us happiness, whatever, eight, seven years from there. And will our relationship still be there seven, eight years from there? Because I don’t want to hit financial independence and not have somebody to be going on runs with and having coffee with and spending time with because that would not be what I wanted in financial independence.
00:30:58
Andy: So we started to pursue this path of Coast FI and said, hey, this is a great middle ground. This will allow us to, once we achieve that, decide if we both want to choose maybe part-time work instead of full-time work. And that pursuit helped us to have some great conversations about what a part-time work life could look like for us from maybe call it 2020 on. And those were really exciting conversations. They started to bring some more joy and happiness and planning in our relationship. And eventually, that’s where we moved. At the time, we were considering rental properties and things like that as sort of our way out. But that ended up being something where we both looked at each other and said, “This is going to be a lot more work than we thought, the whole passive income thing. I think it’s great, but it’s not going to come until much later, as we know from our…
00:30:50
Andy: Friends who do real estate investing. And we don’t really want to do a lot of that active income in the beginning to make it happen.
00:30:58
Andy: So I had been doing a side hustle at that time. We had built up enough money to buy that first rental property in cash. My wife just said to me, which was a beautiful thing, she said, why don’t you just take that as your runway for starting this small business and give it a shot, man. See how it goes. That was like the best thing she could have ever said to me.
00:31:17
Andy: Talk about support. That’s incredible. It was great. It was fantastic. She gave me that permission.
00:31:25
Andy: And with that $100,000, with a side hustle that had proven to make some money, that and the confidence of my wife and that a few money in the bank was enough for me to say in January of 2020, goodbye to my corporate career and move towards a life of part-time solopreneurship and full-time living, which was great.
00:31:47
Brad: That’s so cool. With the backdrop of Coast FI, I think that has really opened up the world of FI to so many people because it was always in a lot of people’s minds. I tried to dispel this myth for years, but it was a zero or one, right? It was binary. It’s I’m not FI or I’m FI. And those are the only two methods.
00:32:10
Brad: Thankfully we have found these different flavors of FI. Just to quickly summarize what Coast FI is for people out there, it’s basically you get to the point where you’ve saved enough money that your net worth can compound in the background and you don’t need to add to it. So obviously to get to that net worth, you need to have saved money along the way.
00:32:27
Brad: But once you reach that point where you’re comfortable coasting, you just need to bring in enough money each year to cover your annual expenses. And that is where you can do part-time, you can do a side hustle that doesn’t need to bring in a boatload of money because frankly, most side hustles don’t bring in a boatload of money.
00:32:45
Brad: But if it covers, if each you and your wife had side hustles or even just had a part-time job that covered the expenses, well, that meets the definition of Coast FI. And that’s pretty darn good and a whole lot less stressful than going to two nine-to-fives.
00:33:02
Andy: Absolutely. And it became a lot easier too when we, as we talked about in our conversation, lowered our expenses. After hitting Coast FI and after paying off our mortgage, we went from spending around like $10,000 a month to feeling comfortable spending around $6,000 a month.
00:33:21
Andy: So between us two, we were like, okay, can we both make whatever $3,000 a month or you make four, I make two, or vice versa? Could we make this happen? And we figured out we could. We have been doing that part-time deal for about four years now.
00:33:37
Andy: It has been fantastic because we’ve just leveraged a lot more of that time freedom towards things that we care about more. That’s taking care of our health, spending time in our relationship, enjoying slow morning coffee instead of rushing out the door, going for runs together, and spending quality time with our kids.
00:34:02
Andy: That has a cap to it when you’ve got a preteen and a teenager; eventually, they don’t want to spend as much time with you, so I need to take advantage of it while I can. Connecting with my friends more, connecting with my aging parents as they’re getting older, these are just other identities that I wanted to lean into besides just being a worker.
00:34:15
Andy: But I still do enjoy working. I try to do my work week between Tuesday and Thursday, so I have that four-day weekend. I’m still experimenting with that a lot, whether that is three physical days or 20 to 25 hours a week spread across the workweek.
00:34:27
Andy: Overall, I’m finding by giving myself 20 to 25 hours back in my week, I’m able to live a more fulfilling life that brings both my wife and me a lot more happiness.
00:34:39
Brad: Nice. I love that. I wanted to go back to the conversations that you and your wife had. So first, I guess the budget parties. I think this is something you started in your late 20s, almost really 15 years ago.
00:34:54
Brad: It sounded like this was something akin to a monthly budget party. I’d love for you to tell everybody about that because I think a question that many people have is, how do I get my significant other on board?
00:35:06
Andy: Absolutely. Yeah. It really started when we got married. We were both living for today and enjoying life as newlyweds. It was a lot of fun. When we got together, I was making $60,000 and she was making $70,000. So immediately by getting married, I got a double raise.
00:35:19
Andy: We were just having fun going to concerts, eating at restaurants, and enjoying ourselves. But then when we learned we were going to be parents, something flipped in my brain, where it was like, okay, we’re going to be taking care of a little girl soon, and I want to give her the best life possible.
00:35:31
Andy: Everything for me turned to my finances being like, okay, I’ve always been interested in it. I had definitely lapsed recently by taking on a lot of debt and enjoying life and living for today. What can we do to ensure we’re giving her a great life and making sure mom and dad aren’t worried about the bills as much?
00:35:47
Andy: So I approached Nicole with some ideas around debt freedom, net worth building, and savings rates. It was just numbers-focused ideas and goals. I remember approaching her after a particularly difficult day where she came home from a corporate job that she really didn’t like.
00:36:07
Andy: I asked her, “Wouldn’t it be great if we became debt-free?” But to do that, she would have to get rid of that car she liked, and we’d have to look at spreadsheets.
00:36:15
Andy: I remember she just walked right by me, saying, “I don’t know what you’re talking about or what you’re reading or listening to. Leave me alone.” I thought, “What are you talking about? This is genius!”
00:36:24
Andy: Then I realized I needed to understand what she actually wanted. I was talking about numbers and goals, but what did she desire in her life? I knew she didn’t like her job; she wanted to work part-time or eventually be a full-time stay-at-home mom.
00:36:34
Andy: So I approached her again, saying, “Would you be interested in discussing a plan where you could eventually work part-time and then stay home?” She was completely on board.
00:36:42
Andy: That’s where these budget parties were born from. I used the term “party” because she wasn’t interested in looking at the budget, so I wanted to make it sound more fun than it was.
00:36:55
Andy: I tried to make it enjoyable, preparing a lot of the work beforehand and thinking, “What can I do to present these numbers and get her buy-in so we are both on the same page about how we’re spending our money?”
00:37:08
Andy: I’d also try to make it a moment, so we’d order a pizza or get a bottle of wine, adding something fun to the routine. We still meet at least once or twice a month, and it has really helped with my own financial anxiety.
00:37:27
Brad: Being on the same page is so important. It really is.
00:37:30
Andy: This was a big part of the reason we went to marriage counseling; we weren’t taking the time to communicate. This just started as another way for us to have dedicated time to talk about something very important to us.
00:37:40
Brad: You had that inflection point, as you talked about, in 2018 and 2019. This shift was significant for you both. It’s important to adapt when those moments come in life, as you outlined. You and Nicole adapted exceptionally well, but it didn’t mean it was easy in the moment.
00:40:58
Andy: Maybe circa 2011, or 2016, et cetera, but they’re not our goals and dreams circa 2019. What were the conversation points? Because I suspect there was a lot of friction. I think this happens in life. You mean you got what you wanted? Like, I can picture it, and I’m not saying you did this, but you got what you wanted, and you’re less happy? Sometimes that’s hard for people to deal with, but obviously, again, with the benefit of hindsight, seven, eight years later, this worked out. How did you guys approach that particular aspect of the conversation?
00:41:30
Andy: Yeah, I would say the only thing that has been consistent in marriage, at least mine, is change. Things change. We change. Our values change. Things that we cared about at 28, I don’t care about anymore at 44, and same with her. And I think that unless we’re taking time to communicate and update each other on what’s going on in our lives, how our goals have changed, how our values have changed, then we’ll miss that.
00:42:00
Andy: By freeing up more time in our schedule over the last five years, we’ve been there to be able to communicate and to be able to understand how those changes are affecting things we’re actually even interested in or not interested in. And when you’ve got young kids at home, it’s even more important, because talk about change. Those changes happen really fast as young kids. So I think opening up that time to communicate and find out what we’re interested in and how we can support each other with our individual goals has been very good.
00:42:34
Andy: I think I was in my own head, my own silo for a little while and of course there were a lot of thoughts up there and somehow she didn’t hear those thoughts. And I was very surprised at that. But it wasn’t until we actually took the time to share those things and speak out loud and create some collaboration that we were able to move forward in a life that we both feel very happy about.
00:42:55
Brad: That’s incredible. So fast forward to today and the where are they now. Is Coast FI still the plan?
00:43:03
Andy: I love that concept, man, because it was around $550,000, I think, around like late 30s, early 40s that we hit and I started to look at those compound interest calculators even with a nice, whatever, 6% real rate of return or 7% real rate of return. I’m like, this is gonna be two million plus by the time we’re in our 60s. That’s plenty for us to live on. And that became very convincing to me.
00:43:30
Andy: Now, right away, I didn’t just stop all contributions. I just, you know, but I lowered them. I think we were doing upwards of 50% savings rate at one point and I just started to edge that down to closer to 10% and it just felt freeing because with that 40% I could say, well, do we wanna maximize more of our family experiences now or do we wanna work less? It’s that 40% where I can now say, whoa, what do I wanna do with that? And my wife felt the same way. She’s like, yeah, let’s have some more fun. Yeah, let’s work less. We’ve done the hard work, let’s do that.
00:44:02
Andy: And lo and behold, even with the decreased contributions and savings rate, that $550,000 is close to a million dollars now in retirement alone. I mean, the market has been nuts over the past six years, but it does prove the power of what this can do without your help and your contributions.
00:44:19
Andy: So I would like that to be out there for people to know that, yes, if you’re waiting, if you’re hesitating, there are other iterations of financial independence that can give you that life that you’re interested in. A lot of this is psychological. Most of this is psychological, honestly, and a little bit of it is numbers, but that has been a really freeing thing for us.
00:44:40
Andy: So haven’t really contributed much to traditional retirement accounts. We mostly just wanna get our enjoyable life set right now. And then, yeah, if we can build wealth from there, from a three-day work week on, great. And then maybe we’ll invest a little bit more after that or not, but we’re happy right now and we’re experimenting with a three-day work week for both of us.
00:45:00
Brad: Man, and experimenting, what a beautiful word, right? I think that’s just so important. And yeah, for everybody listening, that Coast FI concept and the intersection of compounding and the rule of 72 basically means at an 8% annual return, you expect your money to double every nine years. So as Andy’s saying, basically, your money quadruples in about 18 years.
00:45:32
Brad: So you’re figuring out a little less return, so maybe 20 years, but something like that. And it’s $550,000 turns into quadrupled 2.2 million, right? That is a remarkable figure. Now, you actually took, again, with flavors of FI, you guys took an interesting aspect, which is you didn’t lower your income, because that’s a part of Coast FI that you could have done. You just decided to spend more during this time period.
00:46:01
Brad: Now, obviously, people are listening to that and saying, oh, but Andy, that means your FI number has gone up dramatically. And you’re not saying that at all. You’re saying this is for a time period, and albeit a material percentage of your lifespan, right? 20 years is not immaterial out of an 80 to 100-year lifespan. But you can do that, and you can work three days a week in this experiment and have this all operate in the background. And that’s a really fun way of looking at this.
00:46:14
Andy: It’s been fantastic. It’s been a combination of enjoying a little bit more today with regard to our spending and working less. So I think finding that balance was what my wife and I were both looking for in marriage counseling. I didn’t like my job, and I didn’t wanna keep working at it, and she wanted to enjoy a little bit more life right now. And that is the beautiful compromise we found, and I don’t think that we have been happier in our marriage than we are today.
00:46:41
Brad: Amazing, Andy. So that is the perfect way to leave this. This is the inaugural Where Are They Now segment. So I’m so glad it could be you.
00:46:46
Andy: So I know a little bit of where you are now, so obviously from this episode. But you have a podcast called Marriage, Kids, and Money, which is fantastic, obviously. You’re listening to this on a podcast player. Just subscribe to it. You can hear Andy’s fantastic. So subscribe to that.
00:47:02
Andy: Yeah, absolutely. I have a new book out called Own Your Time. It’s specific to this type of conversation for families who are looking for some financial freedom in their lives in order to buy back the most important resource is time. And they can do that for their families. They can do that for themselves personally, for their health, for that community that they’re missing, for their friends, because having just the sole identity of a worker can be all-consuming. And if you wanna have a more diversified life, that’s what the book is all about.
00:47:36
Andy: I love it, and it’s Own Your Time. And I love the next part. 10 Financial Steps to Put Your Family First and Escape the Corporate Grind. It’s fantastic.
00:47:44
Andy: You got it, man. Yeah, you can grab it on Amazon, Barnes & Noble. Thank you so much for having me on, Brad.
00:47:48
Brad: Love it. Yep, thanks for being here. And until next time, I’d love to do another Touchpoint. Hopefully we won’t wait eight years, but definitely another one.
[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.
