← ChooseFI | Financial Independence Podcast
ChooseFI | Financial Independence Podcast
605 | Retire in Less Than 10 Years
01:07:12
Why cashflow FI beats the 4% rule
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- [00:00]
A
Hello and welcome to Choose a Phi. Today on the show, we have Cody Berman back for the first time in over eight years. The last time we chatted with him, he was 22 years old. He was getting started on the path to FI. Eight years later, he's written a book called Retire by 30. While the title is ultra provocative, I think this book really applies to everyone listening. Regardless of whether you're finding Fi at 21 like him, he's up trip truly a product of the Fi movement, or you're finding this. This is your first episode and you are 55 years old. The principles apply to everyone and I think that's what we try to get across with choose of. I constantly. One of my absolute favorite things from the podcast was the path to FI is littered with people who said, I can't do that. And Cody turned it around and said, how can I do that? That is the meta principle that I want everyone to walk away with. And I think you're really gonna like this episode. And with that, welcome to CH at 5. Before we get started, I keep this podcast entirely ad free for two reasons. First, this is a five podcast and I don't want to promote products that I don't want you to buy in the first place. And second, I really like the clean listening experience of a show where you don't have to fast forward ads to keep it ad free. All I ask of you as a listener is the next time you open a travel rewards credit card, go to choosefi.com cards and with that, onto the show. Cody Berman, welcome back to Choose a Vibe. It has been eight years, which is absolutely unbelievable.
- [01:35]
B
I can't believe it's been eight years. My life has changed so, so much, and I'm excited to dive into all that today.
- [01:42]
A
Yeah, just a wee little bit. We met you in January of 2018 at Camp Fi. It might have still been called Camp Mustache at that point. One of the very early campfires that Stephen Boyer put together, you were the sensation of that campfire. I mean, there were whatever, 50, 60 of us there, all relatively successful people in their 30s, 40s, 50s and beyond. Cody took this place by storm and we actually had you on an episode. It was a Phi Roundtable campfire roundtable episode 57R. You were 21 years old back then. You really are a product of the Fi movement. Thanks to. I think your mom was the one who introduced you to it, right?
- [02:25]
B
Yeah, yeah, she got me hooked on Choose5 back in 2017. That was the first year you guys started making episodes Right.
- [02:31]
A
It was indeed.
- [02:32]
B
Choose five. Some other podcasts, I started reading all the books, the blogs. But yeah, that 2017, my mom introduced me after introducing me to the four hour work week. And again, my life has changed so much since then because butterfly effect, like, I read one article, read one post, and then boom, I'm down the rabbit hole.
- [02:50]
A
Yeah, isn't that amazing? And, and first off, I just want to give a big shout out to your mom, Ruth. She's incredible. I still email with her. Even all these years later, she'll send me an email like, oh, I read your newsletter and I can't believe we're doing the exact same thing again. And it's like the 20th thing in the list of things we've done exactly similar since 2017. So you've said a couple times, like, your life has changed so dramatically. So let's just do like a. Where are they now? Before we get into the actual meat of this episode, we met you 21 years old. You were on episode 83 when you had just turned a ripe old age of 22 and you had this plan. You had all these, these side hustles. I think one was a disc golf company, right? And I know in the intervening years you've had a ton of side hustles. You've had an incredible amount of success. Just catch everybody up real quick.
- [03:35]
B
Yeah, so real quick, before I catch people up, I just want to mention one thing because I think this was so pivotal. You guys have choose five groups all around the country. For me going to that campfire, I don't know if you're familiar with Roger Bannister, Brad, but the guy who ran the four minute mile, so he runs a four minute mile. The next year, eight people run a four minute mile. Why? Because they saw someone else do it. So for me, campfire and choose fi. And choose fi groups. Just seeing real people do this stuff in real life was that unlock. Before I had met these people in real life, I was listening to podcasts, I was watching YouTube videos, reading books, reading blogs, and you know, I was grasping concepts and I was like, okay, I think I can do this whole FI thing. But until I met a person in real life, that's when it became like super, super real. So that's when I dove head first and I'm like, oh my gosh, these people are in their 20s, their 30s, their 40s. Work is optional for them. They have millions of dollars. This is exactly what I'm gonna do. And it's funny you mentioned that. First campfire Roundtable episode. I remember in that episode I mentioned I'm gonna retire in less than a decade and it's gonna be easy cause I have it all laid out cause of you guys choose fi. And. And then in a JD Roth guest post, I had mentioned hitting 5 by 25. That's exactly what I did. So to answer your question more directly now with some of that context, I basically just started side hustling like a madman. I was spending 16 to 18 hours a day during those early years. I like to call it my financial freedom sprint from 22 to 25. I tried 20 plus side hustles during that timeframe. And 30 plus to this day, my income kept scaling up. I kept my expenses extremely low. And we can dive into the exact numbers here. But over the course of three years, my income had scaled up from like 96k my first year in entrepreneurship to over $400,000. I was spending $24,000 a year. So I had an insane gap, 379k gap. I was investing in the stock market, doing like the whole nest egg method. I was investing in real estate. I was building a small business. And right before my 26th birthday, this is kind of when I proclaimed 5 by the numbers. I had 500k in the stock market. I had 13 rental properties bringing in $3,700 a month in net cash flow after PITI, capex, maintenance, all that stuff. And then I had a digital products business that was mostly passive, that was bringing in about $10,000 a month. So what? Three and a half years after that first episode, Brad, I hit Fi.
- [05:56]
A
That is absolutely astonishing. And that is clearly an extreme amount of success in short period of time. And like you said with the local groups, part of what makes FI grade and part of what makes our community so special and why people keep showing up is because they do see real people doing this. And it's kind of fun to look at somebody like you who has had outside success and made it happen real quick. But I think we all know that's not the requirement. You even told me before we started, you are a product of the FI movement. It's just an extreme case, right? Like you made this very large gap. And I mean, listen, that's the goal of side hustles. But I think what both you and I would want to get across is FI is really applicable to everybody because of again, you being a product of the FI movement, the tenants of the FI movement. Of course it's easier. It's always going to be easier when someone's making doctor level income, or in your case, extreme success entrepreneurship level of income. Right. It's going to be easier. But if you had made 500 grand a year and spend 500 grand a year, you are just as poor as somebody making X amount and spending X amount. Right? Like it doesn't matter. It's, it's, it's irrelevant. It's about that gap and I'd love for you to talk about where that background came from. Again, not to regurgitate, oh, I found it from choose a vita. But why didn't you start spending more at that point? Like I think that would have been a natural thing for a 23, 24, 25 year old kid to do. But somehow you were grounded enough to say, okay, that's all well and good, but I have bigger plans.
- [07:34]
B
So I get this question a lot and it's usually in the form of what is the most important thing that people need to know to achieve financial independence. I think it's awareness. So this is going back to the Roger Bannister four minute mile thing for me, knowing that five was possible and seeing people do it, I was willing to do whatever it took to get there. So yes, could I have increased my spending to $200,000 that $400,000 income year? I'm still saving 50% of my income, but I wasn't at fi yet. And so I was willing to just keep my expenses at the minimum that I felt comfortable and not deprived and keep hammering the income button. So yeah, I mean, that's the short answer. It was. I just had my eyes on the prize. I knew that I wanted to get to this destination so, so bad that I was just willing to not sacrifice everything. I don't like the word sacrifice because again, I didn't feel deprived, but I was just willing to do whatever it took. And something I like that you say all the time, Brad, is I was willing to live a little bit differently with a little bit of intention. It wasn't like I was doing all these crazy things. And we can get into like how the heck was cody living on $2,000 a month? The actual tactics. But I wasn't living in a storage unit or biking 20 miles in snowstorms. Like it was relatively normal stuff, just slightly different than what my peers were doing.
- [08:45]
A
Yeah, slightly different. Slightly optimized with a little bit of planning. And that goes a long way. You have to have something that you're running towards, not something you're running away from. And let's be clear to everyone listening this is not about finding Fi when you're 21 and hitting the jackpot and with amazing entrepreneurship success. This is a replicable story. It's about trying to earn more, get your spending under control and or more optimized and increasing that gap between your spending and your income. Cody, when you invest that over an intermediate period of time, whatever you define that as for me, I would say like 7 to 15 years is like an intermediate amount of time for people. But in your case, obviously it was much more abbreviated than that. But this is very doable for everybody. That said, I think you need to have something. You're shooting for that North Star. And when you found fi when you're in Your early to mid-20s, you were driven to be successful. I kind of jokingly said, and I've said this about three people other than my two daughters, so let's be clear. But I said at that point, when you were 21, I was like, I wish I could buy a part of Cody's future earnings. I wish, like, if I could buy a little piece of Cody. I've said that about three people. You, Devin, who we had on in episode 504, and a family friend named Judah, who is actually helping me sell a bunch of my old comic books and baseball cards. So I have like three people and you turned out to be this wild success. So I'm batting a thousand so far, but we'll see. But what were you shooting towards? What was that North Star for you?
- [10:15]
B
It was just fi. It was optionality. This might ruffle some feathers from the OG fire folks, but I heard about the 4% rule, obviously and like the nest egg method, it felt too slow for me. I was like, I don't want to have to save up the $1.5 million if I want to live on $60,000 per year. So that's when I started understanding this idea of cash flow Fi and I started like really hyper aggressively chasing passive income in the form of small business, in form of real estate, in the form of digital products. So I think that was kind of the North Star for me. I was like, I want fi as fast as humanly possible. What is the route that's going to take me there? I was just willing to try whatever. That's why I'm a dabbler. Like I've tried over 30 side hustles at this point. A lot of them are in the side hustle graveyard, but a couple of them have stuck and those are the ones that help propel me to FI in record time.
- [11:06]
A
I Like that cash flow path to fi, that's more broadly applicable than it might otherwise seem to people. I think a lot of people are curious, like how different aspects play into their fine number. A perfect example, which is a pension. People wonder sometimes, like hey, I spend, we'll use your example. I spend $60,000. My fine number should be 1.5 million, but I have a $40,000 a year pension. How does that work? It's not rocket science, right? It's like hey, you spend 60,000, you're getting this 40 that comes in each year. So you actually only have to cover 20,000 more. Now you could do it like you with side houses or you could just do a traditional FI method, multiply by 25. Your PHI number now is 500,000, not 1.5 million. So you did that in the side hustle version, which is, hey, I have this money. Would you say $3,700 a month coming in from rental properties, something like that. You had obviously way, way, way more than that coming in from side hustles. I do want to talk about passive income because some of your businesses are passive. But I feel like passive income is such a cute term for a lot of online entrepreneurs. I think you and I both know very, very, very few things, fleetingly few are actually passive. Can you talk about how you define passive income and how you would explain that to somebody else? And like, and just the reality of hey, something can be kind of passive and how you conceptualize that entire thing.
- [12:32]
B
This is a great question and a great framework. Most people hear passive income or active income and it's a binary, it's like 0 or 1. But passive income is a spectrum. Like someone who owns a portfolio of real estate, it might take, and this is coming from experience, a couple hours per month to manage that portfolio. Like that's how much time I was spending, Brad, when we had those 13 units bringing in $3,700 a month. It's not like I was working 40 hour weeks to take in that income. It was, I was spending four or five hours a month because I'd built good systems. Same with online business. Like if you build good systems, good SOPs, you can scale yourself out of the business in some capacities. Now is it 100% passive? No. Like you're, if you're the CEO and you have managers under you doing all the stuff, you are still going to have to make decisions at some point, but you're not going in doing the day to day, like trading your time for money straight up. If you can Even get something to 80% passive income, like that's a huge win. Because if you can, instead of having to work, trading your time for money 100% of the time, if you can instead work a couple hours a month and that's your fi and you do it via cash flow, like heck, yeah, that's, that's a huge win. And that's why I like to work in seasons. Now. I know before we hit go, we were kind of talking about work and like I can't shut off my, my interest in business and just my capacity to work. Like I just, I love to work, but I don't always want to have to work. So some months I'll work 60 hour weeks, 80 hour weeks even, like for my book launch I was working like a madman. But then I'll have some months. Like next month we're going to Europe for three weeks. I'm probably going to be working 30 minutes a day, maybe just like checking in on slack to make sure that things are going well with the business and you know, responding to a servant's service request from one of our rental properties if something comes up that's big and we can't have a property manager handle it. So it's like, no. Is it 100% passive? Absolutely not. But it's 90 plus percent passive, which is plenty good enough for me.
- [14:21]
A
Plenty good indeed. And it's funny, the can't shut it off. I think again, this is yet another thing that is more broadly applicable to people in the FI community, the FI movement, because just almost by definition, to get to fi, to be a little countercultural enough to pursue fi. We're tinkerers. We're people who are interested in things. We want to learn. What are you going to do when you don't have a job all the time? Like, how are you going to fill that time? Aren't you going to be bored? And it's like my response, like, are you out of your mind? Like, I have 112 waking hours a week. I could fill five weeks in one. There are so many things I want to do. I couldn't imagine being bored. I find myself maybe too busy again. It's busy with good stuff. In your case. In my case, like, we are tinkerers. We're people who want to build things. And sometimes, almost inevitably, that's going to lead to some money. But the beautiful thing is it doesn't have to. I think that's the fun part. And I'd love to, love to hear your thoughts on how and Maybe if that's evolved for you. So you've been go, go, go for the eight years that. Eight and a half years now that I've known you and you've built these amazing businesses and such. Where are you now in this? You talked about seasons of work, but I'd ask about seasons of life in terms of taking your foot off the accelerator. Like, do you, do you think about that or are these just like byproducts of how you're wired in terms of. All right. It almost invariably comes back to some type of side hustle.
- [15:53]
B
I think I work less hard now than I did a couple of years ago, but when I hit fi, a lot of people ask me, what happened when you hit fi? You know, I see all the numbers on the spreadsheet. Honestly, nothing. I kept hammering the income button and working way harder than I had any right to for probably the next three years. So from like 25 to 28, my income just kept increasing, kept scaling. I had a massive, massive gap between my income and my expenses. And I don't know if it was like a scarcity mindset or I just wanted to like hit super fi. I wanted to be well off phi via the cash flow method and the nest egg method. I don't know. But I just like kept hammering the income button for the next couple of years. Now, in the last two years, so that was like, until 28. I'm 30 now. In the last two years, I've definitely taken my foot off the gas and I've been able to make non money driven decisions. So I've been doing a lot of, like, fitness competitions. Like, I've run marathons, I've done hyrox events, I play pickleball in a league every week. I go bowling on Fridays with my family in the middle of the day. So I'm definitely like, I would never do these things when I was 22 years old. I wouldn't be caught dead. Not side hustling, not trying to make money. But at this point, I'm just introducing a lot of these things into my life that have nothing to do with money. I'm making the decision because I want to make the decision. Does that mean I'm not working hard during those other hours of the week? No. Some weeks I'm working like crazy because I'm just so invested in whatever project I have going on. But then I have other weeks or other seasons where I'm not. And that's fine.
- [17:19]
A
And that is fine. It's funny, I've been kind of Conceptualizing this as what I'm calling like the Tuesday project. It's what does Phi Life look like on a random Tuesday? Not on some fancy vacation in Bora Bora or somewhere, just Tuesday. And that doesn't mean it's a Tuesday in Richmond, Virginia. It could be part of my future life, might be travel. Life still comes down to an average Tuesday or an average Thursday, or pick your day, but I'm going with Tuesday. And it's about designing a life that you really want to live into. It's about the 52 weeks a year and those 52 Tuesdays. And I'm curious for you, like, what does a financially independent life feel like for you on a given Tuesday?
- [18:11]
B
Now at 30, I focus on this a lot. I don't know if you saw this in the last chapter of my book, but I kind of spelled out what a perfect weekday looks like for me and my wife Lauren. And so many years ago, probably 2019 maybe, when we were just boyfriend and girlfriend, we mapped out a list of the top 10 things that we value independently of one another. We then compared the list after we're done writing them down and we're like, okay. It says travel, health and fitness, time with friends and family, experiences, yada yada yada. Travel is how we're living. Like if we take an honest look at our calendar and our bank statements, is how we're living right now in alignment with what we say that we value. If not, we need to add those things into our life or if there's things in our life that aren't in alignment with those values, we need to cut them out. So we have had a not a long journey, long process, but like we've slowly started to build our life closer and closer to where every Tuesday, every weekday is our ideal day. And so it's been a lot of like slashing stuff, adding stuff back in. But I actually have this pulled up here from the book. So like this is pretty much every single weekday when we're home not traveling. It's like 7 to 9:30 we go to the gym and then or do something active like running or walking. 9:30-10, we have our morning smoothie, we're practicing Spanish, sometimes stretching out. Usually 10 is when I start working on business stuff, various projects like 10 to 12 30, 1230 to 1, we cook lunch together pretty much every day. One to two we have an afternoon walk and then two to six is usually I'm working on different projects or maybe other business related tasks, ad mini type stuff, you know, Something that's firing me up that week. We'll do a little mini workout before dinner from 6 to 6:15. We have dinner from 6:15 to 7 and cook and eat cleanup. Then 7 to 9:30, depending on the night. We'll either be hanging out with friends or we'll be like planning a future trip or we'll be, you know, talking about something in our business. Or sometimes we'll just watch tv or sometimes we'll just talk. Then we get into bed around 9:30, we read in our Kindles for a bit, head to bed, and like that Brad is like our perfect Tuesday. And we have like, you know, a lot of trial and error, a lot of like practicing and trying different things. But we've like kind of really dialed in what that means to us. And if anything ever feels out of alignment, we're like, you know what, maybe we don't need to do this afternoon walk, or maybe we don't want this morning smoothie. Even though we'd never cut those things out, then we'd reassess. And so we actually do a monthly meeting every single month at the end of the month. And we go through a whole bunch of categories. We talk about money, real estate, health and fitness, travel, relationships, our goals for the next month. And then we have like a random category. But so it's just been like a, a project, I guess, since 2019. We've originally made this list, but now I, I, I'd like to say that we have ironed out like what our perfect Tuesday looks like and we try to just stack as many of those per as on top of each other as possible.
- [20:49]
A
Oh my God.
- [20:50]
B
Okay.
- [20:51]
A
That's a way better answer, more in
- [20:53]
B
depth answer than you were expecting.
- [20:54]
A
Oh my God, that's amazing. That's like hitting the question jackpot. That's, that's incredible. Okay. Wow. I have so many follow ups to this. But first, taking a step back is it doesn't matter if that's in New York City, if that's in Boston, if that's at a lake house that you may or may not be building. It doesn't matter if that's in London or in Patagonia. Right? Like it, it's the same Tuesday. And I think that's what's fun about Fi. And also how, how you two did this. This is an iterative process. You figured that out over, you said since 2019, right? Like that's a seven plus year journey. I suspect if we talk in a decade, at least one or two of those things will have changed. And that's perfectly fine, that's perfectly normal. That doesn't mean this, this conversation and your exact Tuesday was a failure. It doesn't mean that at all. It just means life changes. Right, Absolutely. Again, like, and I think the way that I'm conceptualizing this Tuesday project is like, okay, what are the things I want in my environment? Also like you mentioned walks a couple times, Aaron. And I live in a walkable community here in Richmond. And like this is really important for me in the future. I've noticed that when I went to London and Barcelona, I want to be within a three minute walk of a little market or a grocery store. I want to have a gym that's a sub 10 minute walk away, you know, et cetera. You can fill in all these blanks. You don't have to optimize for. I want to live in the perfect city. It's. I want to live in this perfect little micro area where I can take an hour long walk and not be bounded by a six lane highway or something like that. That's very different from saying I want to live in Lisbon to I want to live in this exact neighborhood in Lisbon. And that's part of the fun. Whether the person who you listening to this is saying like Brad, I don't care about those things. Well, that's fine, do whatever you want to do for your life. But like really think through this on the path to fi. Because for most of us, Cody notwithstanding, for most of us a path to phi is going to be 10 to 15 plus years and you've got a long time to think about this and to iterate and work on it. Yeah, Cody, that is really incredible that you guys have this, have this so mapped out. But like you said, there are some days where, hey, we don't, maybe we don't have time for that walk or we just don't feel like it or I'm feeling a little run down. Like that doesn't mean your plan is a failure. And I'm curious, how adaptable are you? Like on a given 10 days, how many of them follow that itinerary pretty closely or like what would pop up of note that would make you say like, okay, look, we usually do two or three workouts a day. We need to stop for now or I'm gonna skip my morning workout for Tuesday through Friday or something does, does that ever happen?
- [23:40]
B
If we're talking 10 days, like a Monday through the weekend to the next Wednesday or whatever that is, we're probably hitting 80% on pretty close to that day. Of course it's not gonna be like the exact timing and maybe some things get shifted around ever so slightly. But no, we're pretty spot on now. The weekends get a little chaotic. If we're traveling, things get a little chaotic and you know, we might have an excursion plan for the whole day. But a typical day where we're like have the capacity to work again, it doesn't have to be. We're in central Massachusetts where we're located. But yeah, honestly I'd say like 80%.
- [24:14]
A
Brad, that's amazing. You have this awesome new book, retired by 30. The subtitle here is how to build wealth, gain freedom and live life on your own terms. Cody, I told you this before we hit record. The book's absolutely fantastic. And the retire by 30 part, it's both the coolest hook but it's also like a potential limitation that someone listening to is saying like I'm already 38, I'm already 58. Like is this still applicable to me? And I'd be curious what, what your response is to that person.
- [24:46]
B
So I definitely stole this out of Tim Ferriss playbook with the four hour workweek. I think the point of his book is just to be more optimized, be more intentional with your time. Buy back some of your time where you can. If you don't achieve a four hour work, like that's fine. If you go from 40 to 30, like that's a huge, huge win. It's the same thing with my book. Like you don't have to retire by 30. You could be starting this journey when you're 55 and then retire when you're 55. That's still a huge win. You're still beating out a majority of the population in terms of your phi age or your retirement age. So no, it's not prescriptive. Like you have to be under 30 years old reading this book or else you're a failure. No, like just because my financial independence sprint was from 22 to 25, there's no reason why someone else can't do that. From 33 to 36 or from 41 to 44 or from. It doesn't have to be three years either. It could be from 50 to 55. Like you can pick this up and start implementing stuff right away regardless of age.
- [25:40]
A
Yeah. And I think what you did at its essence and what most of us in the FI community, all of us are doing is it's not about retiring by a certain age. We're compressing a process that Normally takes what, 40 to 50 years for most people, if they're lucky, into a much shorter period. Hard stop, end of story. That's what we're doing on the path to fi. I think a lot of people can do it in 10 years, especially interestingly, late starters. You could even argue that they have an advantage, a structural advantage, because they're finding FI at the top of their income years. Yeah, that's a pretty big advantage. So, you know, my question to you is, if you lost everything tomorrow and you were starting over at 50 with a late starter, what would you do first?
- [26:25]
B
Probably hit expenses first, see where you can cut without feeling super deprived. And I got a lot of pushback from folks in that demo from 40s to 50s, because, you know, my story is like, I house hacked. That's how I got housing down. I drove a paid off car. I, you know, did some of these things. And people would be like, well, you know, I have a family, I can't do that. If you are willing to get creative, there are ways that you can house hack. Like there are house hacks where, you know, you could buy a four bedroom house that happens to have like an ADU on the property. Like, you don't have to share walls with someone, you don't have to share a bathroom with someone. Like, if you're someone who's living paycheck to paycheck listening to this. Like, I promise you there are ways to get crafty and get creative and create gaps in your between your income and your expenses. So I'd probably hit the expense side first. And I think you guys have talked about this a lot on choosefi. Like it is probably easier and faster to lock down some of those expenses, but then I would turn my attention toward the income side of things. And it's going to depend on your job. If you're someone who has variable comp and a day job and like you can make more from your day job with commissions, or maybe it's jumping to another role in another company, or maybe it's making an internal switch. You can totally do that. You can also pursue side hustles. Obviously I'm partial there, but I'm not like one of those guys who's like, screw the nine to five. Like, if you have a nine to five, you suck. No, I think the nine to five is a great way to hit financial independence. And if that is your main lever for creating income, hammer it as much as you possibly can. But you can also use sod hustles to boost your Income and increase that gap. Because if I could whittle down my book in a one sentence, it's just like, earn more, spend less, invest the gap. Very simple. That is financial independence in a nutshell. We like to make things super overcomplicated, or at least the financial industry does. But that's like, seriously it. I could have invested in pretty much anything during those three years. And to give you some real numbers, like the gap between my income, my expenses, if you were to bucket all my income together, all my expenses together for those three years was like 625k. So unless I'm, you know, buying meme coins and stonks and like crazy speculative assets, if I just invested like any old index fund, I'm. My wealth is going to compound many, many times over because that gap is so, so important.
- [28:36]
A
Absolutely. And somewhere Jonathan is smiling because that is almost verbatim what he said on Jews of I from probably 2019 to 2022. Because that is really it, right? It's earn more, spend less, invest that gap, invest the difference. It's really pretty simple. And you know, it's funny, you were talking about the house hack and the person who's hearing about it for the first time saying, like, I can't do that, man. The path to fight, really, life, frankly, is littered with people who failed saying, I can't do that. I just find that such an almost like pathetically limiting belief that people just love to dismiss, like, oh, that's for somebody else. I can't do that. I'm sure you could rattle off a whole handful of things that people, I can't do that. Oh, I can't sell my car. I just bought it two years ago. Or I have a loan on like, okay, well, maybe you could, like, I mean, how many things can you think of?
- [29:32]
B
Off the top of my head, pretty much everything. Anything that doesn't defy the laws of physics, you can probably do it. Is it going to be uncomfortable? Maybe. If you can get comfortable being uncomfortable, even a little bit uncomfortable during those early years or during the early years of your journey, regardless of your actual age, you're just going to be infinitely better positioned than someone who's just how you're saying it. Oh, I can't, I can't, I can't. You should switch your I can'ts into how can I? And then listen to podcasts like this. Find people who are actually doing it, because I promise you there's someone who paved the path before you. Like, if I just went into fi by myself, Blind without having all these people who had done it before me. The Mr. Money mustache is the world. Choose fi. Grant Sabatier was a mentor of mine. I was able to hit Fi faster than everyone I just named. No offense, Brad, because I'm standing on the shoulders of giants. People had paved the path before me. So whatever age you might be, whatever gender, whatever race, whatever background, I guarantee you that there's somebody who had a very similar path to you that hit fi. And all you gotta do is just copy exactly what they did. Like, it's not rocket science. And because you have them to emulate, you can skip out on a lot of their mistakes. So, like, seriously, the only reason, as you said, Brad, I'm a product of the FI environment of the Fi movement. If I was not standing on the shoulders of giants, I would've had to figure all this stuff out on my own. I probably would have made way more mistakes. But because I literally had this golden path laid out for me, I knew exactly what to do. And so I was able to do it in three years. And I know people who have done it faster than me, which is a really cool thing about all of this and the five movement in general. So long story short, I guarantee there's someone out there with a similar story, similar background to you. Find them, see what they did, and then emulate them as much as you can.
- [31:12]
A
Yeah, I love that. Changing. I can't do that to. How can I? You don't have to reinvent the wheel. The path is there. And you also, you don't have to hit the jackpot, whether it's the meme coins or it's the outsize entrepreneurial success. Because inevitably there are going to be people listening to this episode, even well meaning five people who say, ah, I can't listen to this guy Cody. He did it in three to five years. Who the hell cares? I couldn't do this. It's not about that. It's about the principles. Even if you wanted to take the slow route to Phi and make it a very intentionally make it a 20 to 30 years path to fight, like, that's perfectly okay. You have to decide what works for your life. Obviously, Cody had a particular plan and he succeeded wildly. But I think for a lot of us, this, as you kind of joked on me, like, you hit five way before I did, obviously a full decade or more earlier than I did in my own journey. And like, that's perfectly okay. There's no keeping up with the Joneses on, like, how fast did you do This, I think we're all being intentional and in the lives that we have. I suspect when we first met you at 21 that you had some ideas of things that would really move the needle, things that would matter that might have not have come to pass as mattering. Can you think of anything off the top of your head of like, hey, I really thought this was an integral part of the path to phi and. And it just didn't wind up being that important.
- [32:40]
B
Ooh, this one might ruffle some feathers.
- [32:42]
A
Okay, let's hear it.
- [32:44]
B
Tax optimization stuff. I think people in the FI community, not that taxes aren't important, but people get so enamored with the mega backdoor Roth versus Backdoor Roth and like, all this crazy stuff. Not that it's crazy. I do all this stuff. But you know what matters way more than all that? Tax optimization is the gap between your income and your expenses. And same with, I saw someone arguing in a Facebook group last week, VO vs VTS X. Mike. Okay, yes, you can argue VO vs VTSAX. I'm sure there's people who are probably chopping at the bit, waiting for me to say something wrong, listening to the episode. But again, at the end of the day, if someone's, you know, investing in VO versus VTS X, the person who has the bigger gap is the person who is going to win, not the person who, like, you know, it's traded this many times per day and this is the expense ratio. Like, does that stuff matter? Sure, it matters a lot more when you have like a billion dollars, when you're talking about 0.03% on an expense ratio or something like that. But I think people, myself included, early on in my journey, way, way over emphasize and over optimize for things like taxes and like all these fancy tricks and loopholes. Whereas if you were just to maximize the gap, invest in literally just any broad based total stock market index fund, like you're going to hit fi.
- [33:58]
A
Yes.
- [33:59]
B
So that's the biggest one.
- [34:00]
A
I love it. Well, certainly not ruffling feathers here. I mean, personally, I've never done the backdoor Roth or mega backdoor Roth. It almost seems like to me, like much ado about nothing, frankly. And I know we're myopically focusing on that. Almost everything in life comes down to simplicity. You can write the principles of virtually anything on one index card. And I think the index card for phi is really, really simple. Yes. Can you eke out a couple extra tenths of a percent or 1% better? Listen, I've been talking on this podcast for a decade now, about 1% better. And I hold to that. It can. Both things can be true. Like you can eke out those 1% betters. And I think you should look for ways to improve your life where you can. I think it's how obsessive people get, Cody. I think that's where I find that people go down rabbit holes of, like you said, VOO versus, you know, vti. Come on, guys. These are in most cases, no, this is the one time in history that I can think that they're actually not 99 plus percent the same. Because SpaceX and that insanity that's going on, like, you know, VTI is going to include it. VO is not. For a little bit, for about a year. Can we, with a straight face say that makes any difference on a 15 year path to buy? Of course not. Of course not. And whether you put money in a. As much as I would like to say, I think traditional retirement accounts are more important for most people. Again, not as a blanket statement for most people. You should prioritize traditional retirement accounts over Roth. Do I think that somebody who maxed out their Roth for 10 years made a bad decision or is like doomed to failure? Of course not. They're going to succeed wildly if they focused on the gap. And I think that's the critical part here. All right, Cody, so we've talked about this gap in your mind's eye. How much of phi is math and how much is that identity piece to you?
- [35:54]
B
Ooh, identity. I thought you were gonna say psychology. This changes the question a little bit. Again, awareness. And then having that destination in mind is probably first. So I can actually give a real example. Cause I tried to get my then girlfriend, now wife Lauren on board by showing her spreadsheet. I'm like, hey, babe, look, if we save 80% of our income. Yeah, that did not work. Say, hey babe, look, if we save 80 of our income, we can retire in seven years. We're using like the shockingly simple math article and backing our way into it. And she's like, I don't even know what I'm looking at. So I'm going to say math comes second, psychology first. So what I actually did to get her on board, I'm like, okay, what if we can spend any given Tuesday playing pickleball or going on a hike or going to the beach? Like, we can just do whatever we want on a random Tuesday. She's like, oh, that sounds awesome. I'm like, what if we could take a month off to Travel the world, whatever we want. That sounds awesome. I'm like, okay, now here's what we do. And that's when the math came into play. The identity and psychology piece has to come first, and you have to, like, latch onto that and really want the end destination. I think a lot of people try to sell the plane and the packing and all that stuff versus just trying to sell the Greek islands. A spouse who doesn't know fi doesn't want to hear about the packing and the plane ride and all the stuff that you have to do to get there. You just have to sell them on the actual vacation on the Greek islands and. And then they'll hop on the plane, and then they'll pack, and then they'll do all the things that we're doing in the 5 community to get there. But you have to sell them on the destination first.
- [37:18]
A
Yeah, yeah, I totally agree. And I think, clearly being on the same page with your partner, in this case, we're talking about people who aren't single. It's about alignment. It's about trying to figure out, like, where do we want to go? And of course, you're using the trip, even though we talked about a normal Tuesday, but everybody knew what you were saying there. But I want to go back to those monthly meetings that the two of you have getting on the same page. I think that's something that a lot of couples really struggle with and setting that North Star together and having that conversation. But I'd love for you to really dive into this, like, nuts and bolts, like, okay, she didn't understand because you approached, you know, the stupid Jonathan style way, or, you know, something that a lot of spreadsheet nerds might start with, oh, let's save 80% of our income. This is a great plan. And meanwhile, most normal people are not going to buy that. How and when did that conversation happen? And then what do those monthly meetings look like? Because, again, like, nuts and bolts. I think a lot of partners who are on the path to fight together, they might not be doing those meetings, and they might need a framework.
- [38:24]
B
Okay, so I'm literally going to pull this up on my phone for you, Brad. So I can read the exact categories that we talk about every single month. But we started kind of reviewing our Overall picture probably 2018, 2019. The reason I know this is because we started recording an annual video every year at the end of the year, and our first one was 2019. So that one is just like, actually, I can just share every category that we talk about because I have it here right in front of me. And the funny thing is we haven't watched any of them back. I think we're going to start watching them back when we're in like our 40s or 50s. I don't know. We haven't. That's. That first one was, you know, seven years ago. We haven't watched it back. But I'm so curious to hear what 22 year old me has to say. So the annual review video. This is how we started. We talk about just the state of the world, then our careers, then our investment slash spending, talk about our real estate, net worth update, health and fitness, hobbies, shows and movies from that year, Travel, music and concerts, food, drinks, restaurants, bars, kind of a random category, friends and family and then future goals. So we kind of set out our goals for the next year. Then probably after a year or two we started getting more granular and we're like, let's meet about this every month because, you know, sometimes we'd swing slightly out of an alignment with one another. Like maybe one of us would want to do this and the other one would want to do that. And so we're like, okay, let's kind of snap ourselves straight every month and just get more live aligned, more communicative. So in our monthly review meeting, we do this every single month. On the last day of the month, usually we talk about money. That's the first category which is like net worth update. Like where are our investments going? How did our investments do this last month? Then we talked about our real estate portfolio. If there's anything we need to do, how that's going. Then we talk about health and fitness, how we fared that last month. Do we feel healthy? Do we hit all the goals that we set out to hit? If we're training for something, are we hitting our training goals and time blocking effectively. The next category is travel. So we're mapping out our travel for either that month or the next month. We do travel a lot and so we like to stay on top of that. My wife's actually a travel planner. And then the next one is relationships. So this one's actually interesting because this is Lauren and my time to complain about one another. If there's something that the other person's doing that's bothering us, really it's like a safe space where, you know, if I'm doing something that's bothering her or she's doing something that's bothering me, we can bring it up in the safe space during this meeting so that it doesn't get worse. So we like, we nip the problem in the bud before it happens.
- [40:41]
A
And that's general life. This is not necessarily. So this is like a life meeting, right?
- [40:46]
B
Life meeting, Yep. I mean, we do. It is kind of some financial nerd stuff, but it's a life meeting as well. Just making sure that we're fully aligned on stuff. So, yeah, we talk about our relationship, then we talk about, like, friends and family relationships. If there's anything noteworthy there, then we have just like a random category, a catch all in case there's anything else we need to discuss. And then we set our goals for that next month. So that's our monthly review that we do at the end of every single month since probably 20, 21 or 2.
- [41:10]
A
That is amazing. Are there any other, like, fun aspects? Like, do you have it in a certain place? Do you bring a glass of wine or something? Like, I know it sounds silly, but, like, are there any other habits that you bring into it?
- [41:22]
B
No, these things matter. That's a great question and great observation. So, yeah, we usually do it at a restaurant or we'll cook like an atypical meal. Like something fancy. Like, I know I made like a chicken cordon bleu. One of our other meetings ago. A couple meetings ago. Like, that's not a typical weeknight thing. So, yeah, we. We just try to make it fun. Like it's. We don't dread the. Oh, we're doing the monthly meeting tonight. Like, we make it a fun thing that we enjoy and it's like a fun date for us.
- [41:46]
A
That is fantastic. Thank you for diving into that for sure. All right. I wanted to go back to, like, the reality of five for most people, I think this book is what happens when you take a decade seriously. You can transform your life in a decade or less, maybe, but we'll say a decade. I think a lot of people overestimate what they can accomplish in a year, and they just want to. We see this all the time, right? With fitness, with health, with money, et cetera. But they really underestimate what they can do in a decade. You said psychology before. I'm going to ask you to play armchair psychologist in all the people that you've worked with and you've met. In writing this book and going out and talking to people about it, do you have a sense for this? Is this something that rings true to you, that a lot of people in the broader environment want that instant success? They sprint for a little bit and then they get frustrated and they give up. Whereas it seems like a lot of people who, who succeed with FI are long term, are able to somehow think long term. And that's not normal. I don't think that's even normal in humanity. I think like a lot of humanity is surviving to the next day, right? A, does that ring true to you? And B, like, what do you say to somebody who's just starting out to phi, they just found your book and they know they're undertaking a 10 year journey. How do they get motivated to do that?
- [43:14]
B
So to your first point, a thousand percent people want the instant gratification. It's like the marshmallow test. The people who wait for the second marshmallow, that's us, that's the people in the FI community. We're willing to wait, we're willing to sacrifice a bit, we're willing to delay gratification for a larger pot of gold down the road. But this is why, you know, sports betting and the lottery and these things are so popular even amongst my friends. I mean, these people, I see some of these people on a weekly basis and people are just not long term thinkers. And no matter what I do or say, I see so many people who again, I'm in direct contact with. I think it's just, again, it's the awareness thing. You need to be aligned with the destination. You need to really want this. Because unfortunately, most people are such short term thinkers, they're not willing to sacrifice a little bit each year to then have this crazy compound effect. In a decade or two decades, like a lot of people will come to me and they're like, Cody, what stock should I pick? Or Cody, like, how can I make, you know, $10,000 this month? It's like, that's the wrong question. You need to going back to your point, figure out how to be like 1% better or do 1% more this month and then next month and next month and over the course of five years, you're unrecognizable. Like, that's how my journey kind of went. Even though it was an accelerated journey, I didn't just come out of the gate making $100,000 a month or something like that. Like, that's not my story at all. I didn't have some big tech exit and I had millions. Like my first month in entrepreneurship, I probably made like a couple thousand dollars. That was it. And that was me working like 80 hours a week plus. But I've since built up and scaled my businesses and everything that I have going on to the point where I'M at today. So, yeah, usually for me, like, if I'm introducing FI to someone new, it's just. It's just giving them whatever content they're most comfortable with. Maybe they're a YouTube person. Give them a YouTube video that kind of gives them a general outline of five. They're a podcast listener. Give them a podcast that gives them a general outline of fi. If they're a book reader now I have a book I can give them. But I think awareness is key. Like you're not going to get someone to change their spending habits just by telling them they should change their spending habits. That conversation is going to go very poorly. If you're like, hey, you know what? I think you should downgrade your housing and sell your car and go out to eat way less. If they don't have that destination in mind, they're just going to say, screw you. Why the heck would I do that? Like yolo, life's about living. I could get hit by a bus tomorrow. But in the FI community, we make these intentional choices because we know what's on the other side of those choices. And I think that is the most important piece. You need to be aware and you need to have that destination.
- [45:40]
A
This is something I grapple with. You said those of us in the FI community are the second marshmallow person, right? From the famous experiment. We can delay gratification. Do you think this is. I guess there's a way to negatively look at that and say, okay, we can't actually convince anybody to. To join the FI community who's not already biologically fit for it. And I don't think that's true. I think again, my co founder, choose a fight. Jonathan is the perfect example. Like he is, as he's always called himself, a reluctant frugalist. Where he was a spender, he was an absolute spender. But I think a lot of getting new people into the FI community is finding those people who are maybe inherently long term thinkers. And that's all well and good, but I think that limits the total addressable market, if you will, to be entrepreneurial about it. And like somebody who just says to you, cody, look, I've been a spender my whole life. It's just what I do. It's what I've always done. It's what my parents taught me. It's what's been around me. It's what my neighbors do. Like, how do I see out of this? What are the tangible things they can do to make moves? From that first conversation with you, I
- [46:55]
B
Think usually when someone is coming from that perspective, they don't want to cut expenses or cut anything out of their life because they think that they're going to have to sacrifice. I think probably what I would do in someone in that situation with that mindset would show them that there are alternatives to what they're doing, to live almost the exact same life, but at a lower cost. So going back to what I was mentioning before, like, we lived in a nice one one and we had a four bed, two bath and 600 square feet of office space that we rented out. We also had friends who lived in one ones. They were just paying some of them $2,000 a month to live in Boston. We're in Central mass taking in $800 a month, like so at face value. We're not living very different lives from them. We're living in the same square footage. You know, we're, you know, pretty much doing the same types of things. We have the same amount of parking with everything. It's just we own the building and. And they were renting. I think introducing people to just the slightly different ways that you can live the same quality life is just super eye opening because a lot of people just fall into this. Oh, there's. This is the way, and this is the only way to do it. I can't get my rent down. This is just what rent is. Or I have to keep driving this car. I've already had it for two years. I have this loan on it. Like, just showing people the math behind what a slightly different choice can be and how it's actually not going to lead to a lower quality of life. I think that's probably the way I would approach it. And I would just go category by category with them and be like, okay, housing, transportation, food, travel. Here's how you reduce all of those and still do exactly or almost exactly what you're doing right now.
- [48:28]
A
Yeah, that reminds me of an old article that Mr. Money Mustache that Pete wrote years ago, which was called how to Go From Middle Class to Kick Ass. And it was essentially that. I remember that one, the traditional regular person, spendy person, as Pete would say. And then the Mustachian, it was just category by category. And also, like something that I've touched on so many times here is every hundred dollars a month you can cut out of Your budget is $30,000 less you need in your fine number. But of course, it doesn't end there because you invest that. And if you invested that $100 a month for 20 years at 8% return, you're going to be sitting with $60,000. That's what's crazy. $100 a month. So that's a $90,000 swing on a hundred dollars a month. So anytime anybody ever tells you, like, little things don't matter when it comes to personal finance, $100 a month is a $90,000 swing over 20 years. I mean, that's crazy town, Cody.
- [49:22]
B
Yeah, that is crazy.
- [49:25]
A
I want to do a little rapid fire for you since you've reached fi and you've designed this life that turned into something extraordinary. And I don't see it stopping anytime soon. But I like how you and Lauren have become much, very intentional. I don't want to say much more intentional because it sounds like you've had intentionality for a long while. What surprised you the most in your post Fi life?
- [49:48]
B
I think having to face the reality that anything that I say that I want to do and that I don't do is a Cody problem. Before fi, you can blame things on time, you can blame things on money. But when you have all the time in the world, when you have enough money that you no longer have to work for money, anything that you say that you're going to do and that you don't do becomes a you problem. And sometimes that can be really fricking scary, Brad. Like looking at yourself in the mirror and you're like, you know, I want to get a six pack. I want to be fluent in Spanish, I want to learn the guitar, and you don't do that thing. It just becomes abundantly clear that the job wasn't the thing that was holding you back from achieving that goal. It's something else deeper, more internal that you have to fight. And so I think that's what it was for me. I don't have like a super specific one, but I remember having that realization. Just like it's kind of like when you go to college for the first time and you can just like do anything with your days. And I felt that. But now a lot more mature and with a lot more money and kind of a better grip on the world. And I just remember having that freedom. And it was awesome but scary at the same time. Like, I can do whatever I want with my days. It's almost like you hold too much power. And so again, if you set out to do something and you don't do it, it all just comes back on, you know, that's no longer a time or a money problem. That's a Cody problem. I am the reason why I'm not achieving this goal. And so I think that's probably one of the craziest realizations I had. And I honestly probably still grapple with it to this day.
- [51:11]
A
Well, it's a tough one. And just to commiserate a little bit is I clearly feel the exact same way. And for me, it's been clarifying in the sense that there is a finite amount of time. Even though it seems like you and I have tons of time, it's still, we are beholden to that. 168 hours in a week. If you get eight hours of sleep a night, 112 waking hours, you have to fit everything in there. And it comes down to priorities. I've said for two decades I want to continue learning Japanese. It happens in fits and spurts, but it doesn't really happen. Same as you. Like, it's you with Spanish, right? Like, okay, well, that just isn't a priority. I've said one of my favorite things to do is reading, and I probably read fewer than 20 books in the last year. That's not somebody who says reading is their number one priority. I think you need to be honest with yourself and update your thinking and also, like, not beat yourself up about the fact that that doesn't mean I'm sitting and twiddling my thumbs and going on Reddit 112 hours a week. I'm doing other interesting stuff. It's an interesting realization about time for all of us, and I think we need to give ourselves a little bit of grace when it comes to that. But like you said, it is a Cody problem. It is a Brad problem. But I don't necessarily want to use the word problem because it's about priorities. And I think that the proof is in the pudding, ultimately.
- [52:38]
B
You know what I also think is funny is that I heard myself doing it, and I heard you doing it a bit there. We'll try to explain ourselves out of something. And honestly, if you're fi. And you're just enjoying life, like, it's okay to just be. You don't, like, have to have some goal. Like, you don't have to learn Japanese or be a great reader or, like, learn the guitar or any of the things we just talked about, like, it's okay to just exist and be happy. Like you could. If walking makes you happy and you just, like, walk and listening to music, you can do that for 12 hours a day, and that's a winning life for you. So I think a lot of times, especially in the entrepreneur world, that I'm in. And in the FI world, we'll try to justify the things that we're doing, like saying, oh, you know, I'm so productive. I have all these things that I want to do, and I'm going to do this in my post fi life or before. But I think it's okay with just being sometimes. Yeah, just existing is totally fine.
- [53:24]
A
Oh, it totally is. It absolutely is. And I think frankly, like, finding times to rest and recover and rejuvenate is really valuable just for life. So I love that you dialed into that. And it's not about productivity. It's about trying to build a life that you want. I'm a massive soccer fan. The World cup started five days ago when we were recording this, and I've watched between two and four matches a day, so we're talking four to eight hours a day. And I suspect that's going to continue for the next month. And I have no issue with that whatsoever. But in fairness, I do have to understand that something's going to give a little bit. But that's fine. It's just. This is an example of a season of life, but I'm thrilled about that. There always is a give and take. That doesn't mean you're off on some bad path or something. You just. We're going through each and every day and understanding that. I know I dial into this so much, but, like, it's just really important that we all give ourselves grace of, like, we are trying to figure our lives out. And Cody, I guess in light of that. So in your postfi life, what problems disappeared that you might have been surprised by? And what problems maybe didn't disappear that you were also surprised by?
- [54:43]
B
I mean, the obvious problem that did disappear was just worrying about bills. Am I going to be able to pay the mortgage? Am I going to be able to pay utilities, all that type of stuff.
- [54:53]
A
Hold on, let me jump in. Do you worry about money today?
- [54:58]
B
No, but that's not. Since I hit fi. That's probably three years post fi, while I was still hammering the accelerator, like I mentioned before.
- [55:06]
A
Okay, okay, keep going.
- [55:07]
B
I want to, because I went way past fi and I'm open about sharing numbers. Like, when I hit fi, my net worth was just over a million. Between the real estate and the stock market investments. Like, just before my 30th birthday, I hit the $5 million milestone. I went way past where I needed to go. And I think that's probably why I don't worry about it as much anymore. But it's honestly maybe because I had a scarcity mindset that I had to go so far past the goalpost to stop worrying about money. But at this point, no, I don't worry about money. Like I, I'm getting a lot better at making decisions that are not driven by money, both on the income front and on the expense front.
- [55:44]
A
Okay, Okay, I like that. So I could ask you a million questions, but keep going. Go back to where you're going with that. Problems that disappeared, problems that didn't.
- [55:51]
B
So most money problems disappear. Now I can't go and buy a private jet tomorrow. Like that's not in the budget. But like normal money problems, living a regular middle class lifestyle. I know you've mentioned that a million times, Brad. Like I can live a normal middle class lifestyle with no worries in the world about running out of money. Try to think of problems that persisted. I think it goes back to what I was saying before. It was everyone thinks when they hit FI they're magically going to get in better shape and they're magically going to learn the language and their relationship's going to get better with their significant other or their family. They're going to have more time for their kids, this and that. But if you're not practicing those things during the journey, it is very unlikely that you're going to practice them even more in fi. So again, if you say you want to learn an instrument or you want to spend time with your significant other or you want to learn a language, dedicate 10 or 15 minutes a day now, even during the beginning of your journey, and then as you start to gain some of that time back, as you start to build that financial foundation, that FU money, if you will, then you can start to add more time to those things that you've deemed worthy, that you've deemed valuable in your life. So yeah, I think it's probably more of the same. What I was saying before is like the problems that have persisted is just like the Cody problems. It's. I said I wanted to do this, I am not doing this. Okay, let's actually dig into the real problem here. It's not time or money anymore. It's me.
- [57:03]
A
Yeah, okay. You are post economic at this point, which is wonderful. Have you dabbled in anything that might feel a little uncomfortable in terms of Cody, who was frugal from the time he was born basically until he hit FI versus Cody, now, who just by very virtue, if you were making $0 and you had a $5 million net worth, you could spend 200 grand a year. I Suspect you're spending nowhere near that. If I had to guess, just as an example, Aaron and I this year have started dabbling in grocery delivery. Okay, this is not a big deal, but it's a little uncomfortable to. Instead of going to wegmans, which is four minutes down the road, or Costco, which is 12 minutes down the road, it's not that big of an extra charge for the little extra that Instacart charges you. And then the, the tip. And it's like I just saved an hour and that cost me maybe 15 bucks or something like that. That's a decision we've been trying to expand our horizons a little bit with like, how can I make my life easier with something that might feel a little uncomfortable for the frugal me, the prior frugal me and just kind of lean into it a little bit. And frankly, in both of those cases, we've had great success. And it's been like, man, in my perfect world, I would have done this way earlier. Anything jumped to mind for you on things that you might have changed now that you are, you are fi.
- [58:28]
B
It's funny that you just said bought use of time because that is exactly what I'm doing now that I'm post fi, I buy back my time aggressively. We get all of our groceries delivered. We have people come and take care of the lawn and do our gardening. We have house cleaner. I am all for the services. I am all for buying my time back now that I can afford those things. And 22 year old Cody would throw up at some of the stuff that I'm spending money on now. Like we've upgraded to business class on flights home from Europe. We've stayed in Airbnbs that I would never even think about paying the money for now that I'm again post fi. Like we're going on a trip this summer with my mom and brother and I spent more on that Airbnb in Sweden. I mean I can just say the number spent like $6,000 on just like a seven day Airbnb. I would never ever spend that type of money on just the accommodation. Like my whole vacation would even cost that much. But now that I have the money and now that I have the margin, like again, I'm still aggressively pursuing entrepreneurship. My businesses are still growing. I still have a pretty healthy gap between what my income and my expenses are. But on a nominal basis, my expenses have increased like 5 to 10x since I started on that 5 path all those years back.
- [59:36]
A
It is interesting how our paths, they adjust they have to. Obviously you have this significant net worth and you are earning income. So I mean, you clearly, it goes without saying you never have to worry about money again, which is a really nice place. I think a lot of people, even people who have reached FI on paper or the numbers are sound, I think people succumb to that one more year syndrome and there is some nervousness. Even those of us who have been doing this for a very long time. Is it just overwhelming net worth and income for you where you just realize, like, look, I don't have to worry, or did you still even maybe a couple years ago have lingering doubts?
- [60:20]
B
I think my lingering doubts stopped happening probably 2ish years ago. And my net worth is probably like 2 million lower. So like around 3, I guess for me. And that was like my original FI goal was 1.5 million. I was planning on living on $60,000 a year, which just seemed like a ludicrous amount of money at the time because I was spending $24,000 a year. But yeah, I think because I've continued to build these semi passive businesses where I have the opportunity to work 30 minutes to maybe an hour a day on the worst days while I'm on vacation. But because I have those still rolling, I think I feel a lot more comfortable in my spending because I know for me, and I know a lot of other people I've spoken to in the FI community, just drawing down from a nest egg for me for some reason is like so scary. I am so much more comfortable pulling from cash flow. It's kind of like I've had some friends who have sold businesses for millions or tens of millions of dollars, and they said they felt richer when they owned the business because they were getting monthly distributions and having a $10 million pile just sitting in a bank account or in an investment account, it feels scarier to pull from. I know, for I don't know why I'm wired like that, but living off cash flow just feels safer to me. To answer your question in a roundabout way.
- [61:32]
A
Yeah, no, I hear you. And, and, and again, psychology is important and we can never discount that. Right. It's like. But I think the problem is a lot of people do suboptimal things just to get what they deem as cash flow. Right. Like we've seen people do this with dividend investing or like annuities. Yeah. Like hand over backwards to convince themselves that this is a good strategy because of this magical income that isn't actually income at all. It's a, it's A slippery slope. But we do have to understand that we know it's going to be hard. And I kind of got into this whole to do about this, like, supposed middle class trap thing over the last year or two that friends of ours have been talking about in the FI community. And like, I think it's much ado about nothing in that, like, because of exactly that. Right? It's like you have. You've won the game. You have this net worth. And for people who say, like, I can't sell investments so therefore this doesn't work or whatever, and it's like you're grasping defeat from the jaws of victory. Like, you have literally won the game of life. And people are afraid to be uncomfortable for five minutes. And sometimes you just have to grow up and say, like, look, I'm going to be uncomfortable for five minutes. No matter what my net worth is, no matter what my withdrawal rate, it's going to be uncomfortable. You know that, Cody. I know that when you go to sell that first time, when you've saved your entire life, it's going to be uncomfortable. It's kind of a feature, not a bug. If it was not uncomfortable, we would have done it all along. But you steal yourself for that. And then you log into Fidelity, you click sell for a couple thousand dollars that you need that month, and you go on your merry way. And you did it. If your income streams from your businesses dried up tomorrow and you didn't have your. Your rental property, it's like you still have a net worth of $5 million you've won. And it will be hard to log into Vanguard or Fidelity or Schwab and sell, but it'll. It'll be hard for five minutes, Cody, and then you're done, right? And then the next month, it'll get a whole heck of a lot easier.
- [63:31]
B
Yeah, I 100% agree. I know that it's all psychology that's making me scared of selling my investments, but also I think it's just a function of my age and my stage. Like, I'm 30 years old right now. Lauren and I are planning on having kids. We don't have kids now. I'm trying to make as much money as I can while still thoroughly enjoying the journey. Like, again, some months I'm working an hour a day, not even. But I'm just, like, trying to pad the pile as much as possible so then when we do have a family, I can, like, really, really take my foot off the gas with zero worries in the world. I know if Ramit was Hearing me, he'd be like, cody, you have way too much money. You could just spend whatever you want. I know, I know. It's. It's probably something that I just will continue to battle.
- [64:11]
A
Well, if Ramit was here, he'd be needlessly making fun of the fire movement, for sure, whatsoever. Even though we're. We're kindred spirits and he just wants people to. To click on his. Whatever. We'll put that aside. But, Cody, I love this man. I love it for you. I love your success. I love what you and Lauren have built and where you're going. And the book is really great. We're going to have a link to it. You can find it anywhere. Retire by 30. Cody Berman, I'd love a final word from you, of course, as we, as we leave. And also, if there's anywhere else people can find you, obviously you have a podcast, et cetera. I'm going to leave that to you. But for me, this is not about living a life that is locking you into something. It's. We're buying freedom, we're buying choices, not obligations.
- [64:55]
B
And.
- [64:55]
A
And it's not about retiring at 30 or 25 or 45 or 55. It's building a life, and it's following a path and it's being intentional, and it's building into this life that you want, and it's having fun along the way and iterating and trying and quote unquote, failing at some things and succeeding wildly at others and just getting closer and closer to that perfect Tuesday. I just love that you and Lauren are there, and it'll be so fascinating to have you on. Hopefully it's not going to be another eight years before I have you on and. But if it's eight to ten years from now, I just can't wait to see where your lives are then.
- [65:32]
B
I think that's the coolest part about all this, is I highly encourage folks, if they have a minute or 50 minutes, however long the episode is, to listen back to that first episode. Because if you asked me then during that Camp 5 roundtable or during that first full episode, I did with you guys what my life would look like. I would have never guessed that it would be the life I'm living today. Like, I knew I was going to be frugal. I knew that I was going to have a massive gap between my income, my expenses. I knew that I'd still be into health and fitness and travel and all that stuff. The core of Cody was still the same, but in terms of, like, what my day to day looks like or the businesses that I have. I could have never guessed the things that I'm doing today because like I said, I've tried over 30 side hustles. Over 25 of them are in the side hustle graveyard. But because I took that first step and was willing to be comfortable being uncomfortable, that made all the difference. So to let folks know where to find me, I know you mentioned the book retire by 30retirebrother30book.com CodyDberman.com is kind of my hub for everything I have going on. And then Odyd Berman on all socials is where you can find me. And Brad, just gotta say this is such a cool, awesome full circle moment. Listening back to that very first episode and then hearing myself now or just like talking to you now, it's just, it's so crazy that I'm at where I'm at. And like I said, it's because I'm standing on the shoulders of giants. It's because of all the lessons I learned from Choose Fi. I learned a million different ways to make money. I learned a million different ways to save money. I learned how to invest the money through podcasts like Choose Fi. So I am forever grateful and appreciate you and all you do.
- [67:01]
A
That's incredible man. Onward and upward from here, my friend. We'll have all links in the show notes. And as always, thanks for listening to Choose a VI and being part of the community.