473 episodes

How would your life change if you reached Financial Independence and got to the point where working is optional? What actions can you take today to make that not just possible but probable. Jonathan & Brad explore the tactics that the FI community uses to reclaim decades of their lives. They discuss reducing expenses, crushing debt, tax optimization, building passive income streams through online businesses and real estate and how to travel the world for free. Every episode is packed with actionable tips and no topic is too big or small as long as it speeds up the process of reaching financial independence.

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How would your life change if you reached Financial Independence and got to the point where working is optional? What actions can you take today to make that not just possible but probable. Jonathan & Brad explore the tactics that the FI community uses to reclaim decades of their lives. They discuss reducing expenses, crushing debt, tax optimization, building passive income streams through online businesses and real estate and how to travel the world for free. Every episode is packed with actionable tips and no topic is too big or small as long as it speeds up the process of reaching financial independence.

    312 | First-Time Home Buyer | Bigger Pockets

    312 | First-Time Home Buyer | Bigger Pockets

    In 2008-2009, the American dream of a home with a white picket fence turned into a financial nightmare, sending many families underwater for a decade. After looking at the numbers, there’s an ongoing debate over homeownership. Owning may not be the right decision for everyone. Scott Trench and Mindy Jensen from BiggerPockets join the show to discuss home buying and their new book, First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes. Even if you’ve already purchased a home, Scott and Mindy’s book is a masterclass to help you rework the process during your next home buy. According to their book, “…a smart home purchase will not only give you a place to live, but also offer flexibility, financial stability, and the chance to recognize and increase in that home’s value over time”. Is purchasing a home a good investment? Mindy says, “Maybe”. Housing is an expense whether buying or renting. The more you buy, the more you are spending, and the less wealth you will have. Don’t ask how much can you afford. How little can you spend to meet your lifestyle needs and what’s the best financial decision to meet those needs? There’s a lot of math behind a buying vs. renting decision. As a real estate agent, Mindy tries to stop herself from asking clients how much they can afford. Instead, she asks about the price range, what kind of home they are looking for, and what condition it should be in. Mindy’s home is an investment, but that’s because she buys dumpy homes, fixes them up, and forces the appreciation. However, she says the average person shouldn’t consider their home an investment. For the average buyer, appreciation will generally occur over the course of the ownership time period, but it is the product of the housing market around you. It tends to appreciate 3-8% year over year. Selling after just a few years of ownership won’t make much when you sell, in fact, you may lose money to closing costs. For regular buyers, a home is a place to live, not an investment. Roughly 10% of a property’s purchase price is out the door in closing costs the moment you buy it. If you don’t improve the property and force the appreciation, you have to allow appreciation to carry you back over time. Over a long period of time, the returns on your home are low compared to investment alternatives like the stock market. When deciding to buy or rent, what’s the breakeven point? Scott and Mindy assume a 3.5% appreciation rate, which comes from the Case-Shiller Home Price Index. At that rate, the breakeven point comes in 5-7 years. The higher the appreciation rate, the faster you reach the breakeven point. You don’t need to live in the property for the 5 to 7 years to reach the breakeven point, you only need to own it for that time to make it work. You could rent it after you move out as an exit strategy and increase the desirability of buying. If you rely on a lending calculator to answer the question, “How much house can I afford?”, you’ll end up being house-poor. Median incomes and home prices around the country differ more than other categories, such as food. All the disposable income over what is needed for day-to-day life can go to your scarcest asset, which is housing in many high-cost-of-living areas. There is no rule of thumb for what percentage of income you can spend. It’s about how little house you can buy and eliminate all of the waste. When making the rent vs buy decision, Scott says the biggest variable to consider should be time, then what your appreciation is going to be, what you can do to force the appreciation, and then exit strategies. There can be a dramatic difference between a home you would want to live in and one you could potentially rent. First-time home buyers tend to live in the property, but it’s likely they won’t live there forever and should make the s

    • 56 min
    311 | How to Travel for Free | Stereo Live Q&A

    311 | How to Travel for Free | Stereo Live Q&A

    • 1 hr 16 min
    310 | Get Good with Money | Tiffany Aliche, The Budgetnista

    310 | Get Good with Money | Tiffany Aliche, The Budgetnista

    “When you are financially whole in the way I’ll teach you to be, you won’t have to live in fear. You’ll have a plan for each area of your finances so that they are constantly working on your behalf“. — Tiffany Aliche America’s favorite budget expert, Tiffany Aliche joins us to discuss her new book, Get Good With Money. Financial fear can come from financial trauma and drama. When you know that the money you are making isn’t quite enough for the things that you absolutely need, or you can foresee a future when your finances will not be okay, most of us carry that fear secretly and with a sense of shame. Tiffany wants her community of more than 500,000 Dreamcatchers to release that shame, focus on solutions, and create plans that actually work. According to Tiffany, wealth is more than just money in the bank. It’s really a mindset, which is the building block of personal finance. People often chase an end goal without a foundation to ensure they will still be okay if something were to happen. Tiffany’s teachings are foundational. The goal is to give you the foundation that you need to go on greatness, such as investing at a high level, buying the home you want, or starting a business. For many of us, fear comes from a lack of knowledge and it takes an external, traumatizing incident to awaken us. Tiffany wants to reach people before they get to that point by normalizing financial education early on. Tiffany’s approach is three-pronged: knowledge, access, and community. She delivers knowledge through her blog, The Budgetnista, and podcast, Brown Ambition. For access, she showcases other financial educators, like the ChooseFI Foundation, to those who want a financial education for the children and community. And finally, she built Dreamcatchers for the third prong, community, so that people know they are not alone. The 10 components that constitute financial wholeness are budgeting, savings, debt, credit, and learning how to earn for the first tier. In the second tier, she includes investing for retirement and wealth, insurance, net worth, your professional money team, and estate planning. This foundation of financial wholeness is what you build the rest of your goals, hopes, and dreams on. While writing her book, Tiffany decided to Google, Jake the Thief, a man from her past who had caused her financial trauma. She discovered that he had escalated his thieving behavior from poor 20-something-year-old women to defrauding the United States Government and he is currently sitting in federal prison. Jake’s story is a cautionary tale. Sometimes the wrong thing or risky behavior works for a short period of time. But it’s important to learn how to manage your money from the ground up versus from the top down because you can lose it all if you don’t know how you really built what you built. Tiffany ended up with credit card and student loan debt and a mortgage she could no longer pay for, In total, it was around $300,000 in debt. That experience taught her that her father was right, slow and steady wins the race. She now takes her time and is very methodical with her decisions. Even it means taking a loss, she’ll take a short-term loss if it means a long-term win. Once she built her foundation, she was able to build wealth much more quickly. She wants others to have the opportunity to build the life that they want. After reading her book and matching one of her workshops, Jonathan says he likes how good Tiffany is at organizational structure and categorizing things. With budgeting, Tiffany assigns control categories to expenses. First, she lists all of the expenses and then assigns them to categories. The first category is B, or bills, like a mortage. Some of those bills are usage bills that fluctuate depending on usage, such as water or electricity. She puts a U in front of those Bs. Everything else is a C

    • 43 min
    309 | College Hacking : The Comprehensive Guide | Stereo Live Q&A

    309 | College Hacking : The Comprehensive Guide | Stereo Live Q&A

    Winter is over, spring is here, and Brad and Jonathan have hosted their fifth live event on Stereo! With the new season and sense of hope, people are beginning to think more about traveling and travel rewards points. Start thinking about a trip you want to take and join us on Stereo next week for a live group travel rewards coaching call with Brad. The focus of this episode is college. How can you do college for less or do you even need to go to college at all? After more than 400 episodes, optimization tactics related to college have popped up frequently. What has changed for 2021, what are the best practices, and what should you be thinking about? In the FI community, we take a step back, see the world for what it truly is, and look at a problem a little bit differently. Society tells us that college is on the path to success, but knowing what we know now, there may be another way or a way to improve the ROI of going to college. Back a generation or so ago, it wasn’t uncommon for a college student to be the first in their family to attend college. College was seen as a way to make it into the middle class. It may have been true then, can still be true in some ways today, but the difference is the cost of college has risen dramatically while the earning potential did not rise at the same rate. We have to be looking at college through the lens of ROI and understand what we are trying to get out of it. College signals that you can follow the rules, but an undergraduate degree doesn’t necessarily mean you have skills or mastery over something and it’s skills that matter today. No one can afford to go to college for one hundred thousand dollars and come out earning $50,000. It will create financial chaos for a decade or more of your life. Most people’s incentives to go to college fall into one or more of these three areas: wanting to have the college experience, access to higher-income jobs, or a love of learning. The college experience was not high on Jonathan’s list of priorities, nor was attending a prestigious university, so he did two years of community college before transferring to Virginia Tech. Brad’s goal for college was to get a job upon graduation. Though he was accepted to Ivy League schools, he chose not to go to them as they were too expensive and opted for the University of Richmond instead. If having the college experience or getting into the right school are top priorities for you, listen to ChooseFI episodes 114 and 154 to learn more about how to discount the cost of college using test scores and the FAFSA. In episode 083, Cody Berman talked about how he approached applying for scholarships as if it was a part-time job and thought about it systematically. Rob, from The Simple StartUp, called in to say that his parents used geo-arbitrage and moved back to Ireland so that Rob and his siblings could go to college for much less. For graduate school, Rob coached women’s soccer in a graduate assistantship so that he was able to get his Master’s for free and earn a stipend. In episode 138, Anthony Gary discussed how he hacking his college room and board costs by becoming a Resident Assistant. Other past guests have talked about utilizing niche scholarships, like ones for golf caddies. One listener left a voicemail asking how to incentivized kids to apply for scholarships. Jonathan would like to try and gamify it for the kids and Brad believes that there are a lot of merit scholarships available if which college your child attends isn’t concerned with attending the most prestigious schools. He and Laura have made it clear with their daughters that they don’t care about prestige when it comes to college. Choosing where to go to college may mean saddling yourself with student loan debt for decades. We are having 17-year-olds make these decisions that can negatively affect their lives for decades w

    • 1 hr 15 min
    308 | 102 Business Ideas for Kids |Simple Startup with Arianna and Sheila

    308 | 102 Business Ideas for Kids |Simple Startup with Arianna and Sheila

    Do you have a budding entrepreneur at home? Help them bring their business ideas to life, learn the value of money, and gain future-proof skills. About a year ago, Rob Phelan, launched The Simple StartUp workbook and live coaching series aimed at helping kids aged 10-18 develop their first business idea. This episode will highlight lessons learned from his program. The Simple StartUp has given Brad a language to talk with his own girls about business and entrepreneurship. His daughter, Molly, has grasped the concept of affiliate marketing and how it might help her Gardening Gals business. Molly and her friend are now making slime and thinking about the costs of each component in the slime like little businesswomen. Rob says even if she doesn’t become an entrepreneur, she is learning personal finance skills, problem-solving, how to break down costs, and return on investment. These are conversations every parent can be having with their child as we are all customers of different businesses. Rob has put together a document that parents and kids can use as a launch board. Access it for free at ChooseFI.com/idea. At the core of any business idea is something that will solve a problem for someone else. The Simple StartUp tries to help kids get past the idea that they need to come up with the perfect idea before they can start a business. In reality, you’re going to go through multiple businesses or many iterations with your business. It does not need to be super creative or innovative to get started and learn about the process. In his document, Rob came up with 102 ideas that kids ages 10-18 can start at home right now if they have some skills and equipment available. The kids taking Rob’s course usually start with assets they already have by thinking about their skills, hobbies, and interests. They go through a thought exercise of thinking about complaints people have and what solutions they propose for solving them. Can they solve it in such a way that people are willing to pay for it? Parents can prompt their children to go through the thought exercise themselves when they have a complaint about something. Everyone has something that they are marginally better at than the people around them. Annalise messaged Jonathan to let him know that her Easter cards have been released. In The Simple StartUp, she has learned what a powerful selling tool word-of-mouth marketing can be and is working to create super fans by reaching back out to previous customers like Jonathan. What Analiese is doing is core to business development. Like Kevin Kelly states, you can make a living forever if you have 1000 true fans. Recommendations from someone people trust are better than any PR you can pay for. Rob has made some changes to the course since last Summer and Fall. Parents have been requesting to have immediate access to the course to feed existing passion and excitement rather than wait for the next cohort to begin. Not every kid needs the structure of a group course. As an alternative, Rob has created a self-paced, on-demand course that any entrepreneur can start right now. It includes video lessons and an online community of course alumni. The next cohort course will be The Simple StartUp Summer Challenge, beginning at the end of June and running for six weeks. How can parents foster these conversations with their children and help them start? Use the 102 Business Ideas document as a starting point and ask them to come up with other ideas for solving the problem and then how it could make money. The Simple StartUp student, Arianna, started a finger puppet business after talking through the business idea with Rob. She began using free tools create awareness for her product and after receiving positive feedback, switched to Etsy which would direct customers to her. She has learned a ton in the process and had fun doing it. Arianna’s m

    • 45 min
    307 | How to Factor My Mortgage Into My FI Number| Live Stereo Q&A

    307 | How to Factor My Mortgage Into My FI Number| Live Stereo Q&A

    After four weeks of hosting the live weekly show via Stereo, Brad and Jonathan continue to refine the format and come up with ideas for improving the experience. Jonathan needs some specialized dental work performed and the dentist he found is out-of-network. Insurance isn’t going to cover much in this situation, but thankfully, it doesn’t put him in financial straits. As they reminisce about being children of the 80s, Brad and Jonathan come to the conclusion that time moves on and the rulebook changes. If you are stuck in a world that doesn’t exist, you aren’t going to be successful. Be aware that things change and be open-minded. Google is coming out with its own certificate programs in project management, data analytics, and user experience design through Coursera what will cost most around $250. Google is partnering with 130 other companies to partner with them to hire the graduates of these programs. In past decades, a college degree may have mattered, but in 2020, employers are looking for what can you do or what have you done, not necessarily the degree. Listener Colin called in to say that he started a side hustle last year teaching people computer programming and asked about how to go about finding new clients. Jonathan says that as a business owner, Colin has a product he has created and needs to figure out how to deliver that product, ensure a great experience, find new customers, and finally scale and grow the business. For Colin’s business, is there an awareness problem or is there a problem converting awareness into sales? Brad says something that has worked for him is making connections within his niche and be authentic. Jonathan suggests establishing yourself as a subject matter expert using LinkedIn and Quora and a blog or podcast to begin attracting people interested in the subject. Another thing Colin should do is demonstrate his course has value, get testimonials, and constantly test and iterate. Marjorie called in because she knows how much Jonathan loves the Paprika app, but recommends a similar app called Whisk. It can download recipes from the internet, but you can also take pictures of recipes to upload to the app. Plus, it organizes recipes really well, has a weekly meal planner, and can create a shopping list. The next caller said she loved the coaching call that Jonathan did with Corrine and would love to hear more of those kinds of episodes. Jonathan worked with Households of FI member, Corrine to map out her FI number. Jonathan recommends watching the video for that episode because he shared a lot of screenshots while working with Corrine. Similar to the recipe app Whisk, Brad said that he could have saved money on his recent CT scan using MDSave. Instead of being charged $2,093 for his scan, a provider found through MDSave would have cost him just $289. He was eventually able to negotiate the bill down to around $1,300, but that is still much higher than he needed to pay. The next caller from LA is a side hustle addict. He has been self-employed his whole life and realizes that his nest egg is very small. He wants to know where he should focus his investments for retirement. The caller has a choice between a SEP IRA, a Simple IRA, and a solo 401K. There may be some advantages to using one over the other depending on the size of the business. Brad has set up a SEP IRA and thinks that a solo 401K would have allowed him to defer more money by contributing as the employee and employer. A SEP IRA only allows for employer contributions. If he still meets the income thresholds, the option for a Roth IRA may also be available. There is little downside to contributing to a Roth IRS since contributions can be withdrawn tax and penalty-free. The next caller shared what they would do if looking for a career move. For their technology and financial services company, they would focus on people and

    • 1 hr 15 min

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