600 | FI 101: Teaching Financial Independence to Your Community

Summary

ChooseFI Podcast
Episode: FI 101: Teaching Financial Independence to Your Community
Date: May 25, 2026
Guests: Alan and Kristen, St. Louis FI Group
Hosts: Jonathan & Brad

---

Episode Theme & Purpose

In this episode, Jonathan and Brad spotlight the resurgence of the St. Louis ChooseFI community, focusing on how Alan and Kristen transformed a dormant local group into a thriving community educating people from all financial backgrounds. The main discussion orbits “FI 101”—a foundational curriculum for teaching financial independence to beginners, and techniques for fostering inspiring, supportive local communities. The episode is rich in actionable advice, strategies for education, and motivational stories.

---

Key Discussion Points and Insights

1. Rebooting and Growing a Local FI Community (05:25 — 13:02)

• Kristen shares the story of inheriting a “dead” St. Louis FI group and revitalizing it by acting on the impulse, “I just created what I wished existed. You know, nobody else is going to do it. Why not me?”
• Initial meetups started casually (brewery hangouts: 5, then 8, then 12 people), prompting experimentation with more structured formats.
• Case studies became the core educational event, dramatically increasing group engagement and attendance.
• Consistency—meeting on the first Thursday monthly—helped drive growth: “People told us that the consistency of knowing when it was mattered.” (06:18)

2. The Role and Magic of Community (09:12 — 14:51)

• Alan’s motivation: “We just want to give back. We’ve been blessed enough to be able to retire early. And now how do we help others do that?” (08:23)
• Community brings together people at all stages: those brand-new to FI, and those who are already FI but enjoy the camaraderie or want to share experience.
• Both Kristen and Alan highlight the unique support, inspiration, and idea generation that arises from meeting like-minded people.

3. Personal FI Journeys: From Struggle to FI (13:02 — 19:32)

• Kristen’s path: grew up in poverty, “hit broke at 36,” and climbed her way out through education and dogged pursuit of better financial knowledge.
  • Initial steps: Dave Ramsey’s baby steps → transition to the FIRE movement after discovering ChooseFI and J.L. Collins.
• 2022 CampFI event was transformational: “For the first time in my life, I truly felt like this is my tribe.” (14:24)
• The community gave her the courage to negotiate a unique part-time work arrangement, allowing her to balance work and travel: “I would have never had the confidence, first of all, I would never had the idea but let alone the confidence to go and pitch this to my employer if it weren’t for this community supporting me.” (14:52)
• She now runs “FI Friends Travel,” organizing sold-out group trips for FI-minded people: “I want to travel. These are the people I like hanging out with. And there wasn’t anything that existed like that.” (18:26)

Notable Quote (Kristen):
“I have created this amazing life for myself and 100% of it is due to this community.” (15:47)

4. The Power of “Creating What You Wish Existed” (23:08 — 25:56)

• Alan describes his passion for giving back as seeded by influential teachers and a career spent training others for their next step.
• “Nothing is better than having someone come up to you and say, after the 101, we went to a bar... someone said, ‘I think you might have changed some lives today.’” (25:36)

5. Teaching FI 101: Structure and Content (28:55 — 38:57)

• FI101 was designed as the curriculum Kristen and Alan wish they’d had years ago.
• They used templates and resources like “The Money Guy’s financial order of operations” and ChooseFI’s “pillars of FI.”
• For most people new to FI, the first step is simple: “If I have a dollar gap from what I earn to what I spend and there’s something left over, where do I put that?” (29:35)
• Alan focused on the importance of the “why” in FI:
  • “You get to maintain your lifestyle without trading your time for money.” (31:53)
• Jonathan pushes back on the need for “PF101” vs. “FI101”: “Personal finance has failed for one very singular reason: it has no why behind it.” (33:00)
• The St. Louis group is thinking about deeper exercises, such as having everyone articulate their “why” for FI at a meeting.

Notable Quote (Jonathan):
“If I didn’t have to work ever again for money, what would my life look like? What would I do with it?” (33:00)

6. The Importance of Action and Storytelling (38:57 — 41:05)

• Brad underscores: “This is not just a passive endeavor. … The world works by individuals standing up and saying, I want to be the change that I want to see in the world.” (38:57)
• Stories and real-life case studies are invaluable for making the concepts relatable and actionable.

7. FI 101 Core Content — The Nuts and Bolts (41:05 — 56:52)

• Alan and Kristen walk through the FI 101 agenda:
  • What is financial independence?
  • The “shockingly simple math” (referencing Mr. Money Mustache’s article): understanding how savings rate and the 4% rule can determine your FI target.
    • “You don’t know what you know, right?” (41:27)
  • First action steps:
    • Do an expense audit and value matrix.
    • Track your net worth.
    • Ask yourself what you’d do differently if you started over.
    • Do a personal case study (even if just privately).
  • The financial order of operations: emergency fund, employer match, paying off high-interest debt, then investing.
  • The “Pillars of FI” and opening IRAs, HSAs, using low-cost index funds.
  • Investment focus: “VTI and Chill” — keep it simple.
  • The importance of investing over just saving: the opportunity cost of keeping money in savings instead of the market.
  • Low fees matter:
    • Brad’s illustration of how a 1% fee can cost an investor millions over a 40-year horizon.
    • “There’s no way... they’re going to beat the market. So therefore this is a terrible decision in terms of expected value... these fees cost you $3.3 million in this scenario.” (60:30)

Notable Quote (Brad):
“Over a 40-year period, almost nobody is going to be able to beat the market. The best you can do is to match the market. Therefore, finding this advisor who’s putting you in this fund, there’s no way they’re going to beat the market.” (63:55)

8. Making FI 101 a Repeatable, Community Narrative (67:22 — 73:42)

• Looking ahead, Kristen suggests a cadence: FI101 every January, FI201 in Q2, Taxes/AMA in Q3 or Q4.
• Alan’s two big actionables for new community members: “Track your net worth” and “track your spending.”
• The case study model provides natural accountability and learning for everyone, allowing practical application and peer sharing:
  • “If you do a 5101 and you have individuals that do follow up exercises like... an expense audit... then they can volunteer that information to be a case study.” (70:03)

---

Notable Quotes & Memorable Moments

• Kristen: “I just created what I wished existed. You know, nobody else is going to do it. Why not me?” (05:25)
• Alan: “After 15 years of marriage, we finally hit broke.” (10:20)
• Kristen: “I left my first campfire with my FI date, which actually is July 5, 2026, which is right around the corner.” (14:25)
• Brad: “FI is not just about the nuts and bolts of money.... It’s about creating the life that you want to, whatever that looks like to you.” (39:27)
• Jonathan: “Personal finance has failed... it has no why behind it.... All we’re really doing... is saying, let’s put your why first.” (33:00)
• Brad: “These fees cost you $3.3 million in this scenario. And that’s staggering.” (60:30)
• Alan: “Stories make the world go around.” (35:33)

---

Important Timestamps

• 05:25 — Kristen: How she rebooted the St. Louis group and what sparked the change
• 13:26 — Kristen’s personal financial story, climbing from poverty to FI
• 18:26 — Kristen launches FI Friends Travel; power of “do it anyway,” peer encouragement
• 25:36 — Alan: the joy of learning they “changed some lives” after a session
• 28:55 — How Alan and Kristen constructed FI101 from scratch for beginners
• 33:00 — Why “why” matters: distinguishing PF101 from FI101
• 41:05 — The role of action, expense audits, and value matrices in beginner education
• 60:30 — Brad’s deep-dive on investment returns, the devastating impact of fees, and simplicity
• 67:22 — Kristen on planning a repeatable annual curriculum and next steps for new joiners
• 70:03 — The value of peer case studies and follow-up action

---

Structure and Tone

• The episode’s tone is conversational, encouraging, and practical, with humor and warmth. Insight is combined with humility and vivid, relatable storytelling.
• The recurring refrain: “Create what you wish existed and share it”—whether that’s a financial education session or a travel group.
• Emphasis is always on action: “You can be the change you wish to see.”
• Both guests and hosts reinforce that FI is not about perfection or outperformance—it’s about community, continual improvement, and ownership over one’s life choices.

---

Summary

This episode is a deep exploration of how ordinary people can catalyze extraordinary, supportive financial communities by proactively teaching the basics—and inviting others to dream bigger and take concrete steps toward financial independence. Listeners are shown a replicable path: start small, focus on community and consistency, provide basic education (begin with “why”), celebrate diverse journeys, and always emphasize actionable next steps, peer accountability, and story-sharing. The episode closes with a preview of an upcoming “FI 201” discussion, promising ever-deeper dives into practical tactics and advanced strategies.

Transcript

[A]

Hello, everyone. We're back at it and we're going to dive into this idea of financial independence 101 ChooseFi and the Choose AI community has always been about crowdsourcing personal finance. Nobody just wakes up just knowing it all, having it all mapped out. But people that are intentional, people that care, people that notice patterns and then notice a community that is collectively noticing the patterns tend to win at life. And that's what this community is. So today we're going to go full circle with this and going to be talking with Alan and Kristen from the St. Louis Financial Independence Group and take a look at some of the best practices and what they've experienced and seen and use that to really fine tune this idea of what is financial independence 101. And then how do you fully leverage that to help your local community? And with that, welcome to the ultimate crowdsource personal finance. This is ChooseFi.

[B]

Before we get started, I keep this podcast entirely ad free for two reasons. First, this is a FI 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.

[A]

All right, guys, very excited to hop into this week's episode. And to help me with this, I have my co host Brad here with me today. How you doing, buddy?

[B]

Jonathan? I am doing quite well. I've been looking forward to this episode for a while. You and I have Talked about the St. Louis group, this mythical St. Louis group for months and months and months now. And we have Kristen and Alan here today to talk about not only how Kristen specifically rebooted this group and turned it into one of the most thriving choose of I communities in the entire world, but then how they spearheaded this program to start an Fi101 locally. They had 70 plus people show up for this and it continues. They just had Fi201. And who knows where that can go? And what's fun is you and I can help crowdsource this. This is what we've always talked about. How can we take an idea, a germ of an idea, and build it into something extraordinary? Now what's wonderful is Kristen and Alan have done this. Kristen's rebooted the group. They started this FI101. They had case studies, and now Other groups all across the country and world can pick this up and run with it. I just, I find that so exhilarating.

[A]

I think there's this incredible aspect of this that you can just move the ball a little bit forward. It's not that you need to finish the race yourself. I love mixing metaphors. I struggle with just staying inside the bounds of one metaphor, but you just move it a little bit forward. Someone else can be inspired by that or maybe it just meets kind of something they were already thinking about, but then you're adding a little piece to the puzzle. Right. They have now moved it down the field further and because they've done that work, it's never going to be undone. Now the community at large sees it and it's being emulated and it's making it so much easier for other communities to replicate or repeat or see their own version of this success. Like what does success mean? Well, it's just a community that wants to see community grow and build. And I think if we to go back 10 years or something like that and we would say, hey, what are the top 10 financial independent cities in the world or the country or whatever else. I don't know if St. Louis is just going to automatically show up, but through the lens of community, through the lens of finding a group of people in a geographic region that understand the advantages, the challenges and the opportunities of that location and then how to apply it to your own individual life, suddenly it transforms everything. And instead of maybe thinking about geo arbitrage, about how you can get away from XYZ and go somewhere else, greener pastures, you're looking at, this is where we've chosen to call home. And wow, isn't it amazing to find a tribe of like minded individuals in this place that we're choosing to call our home.

[B]

And I think this is the perfect launching point to bring Kristen in. So you mentioned St. Louis, right? And this is no knock on St. Louis, this is no knock on Richmond, this is no knock on any city. But yeah. Would you have imagined if I would have said to you maybe our two most thriving groups in non like New York City, New York City is fantastic.

[A]

But Jacksonville, how do you say this without disparaging another.

[B]

I know, I know. Goodness, I'm trying so hard. I'm trying very hard. Jacksonville, Florida and St. Louis, you couldn't have predicted that that's good for them. But they have created a pattern. All cities can follow this and I think that's where this, this is going to be a great launching point. So interestingly, in Florida, in campfi earlier this year in January, we had a choose a fi local meetup. It was like an admin meetup, basically, where Kristin and Brad and Rebecca from the Jacksonville group, we had all three of them there. It was a meeting of the minds of all these local admins to see how can we grow these groups. So, Kristen, time to bring you in. You have completely rebooted this group and taken it from, as I understand it was. It was, if not dormant, it was certainly a tiny, tiny, tiny fraction of what you see today. What did it look like when you decided, hey, I'm going to step up and be an admin?

[C]

It was dead. It existed, but it was dead. No one was really doing anything with it. The reason that I did this is because I had just gone to my first ever in person event, which was a campfire, and I really felt like I found my tribe. It was life changing for me. I came back and I'm like, how long is it going to be before I get to hang out with these people again? Like, I really need these people in my life. So I realized that this choose five group already existed and there were a lot of members, but nobody was doing anything. And I just created what I wished existed. You know, nobody else is going to do it. Why not me? But I didn't really know how to start, so I just was like, well, let's just get together at a brewery and kind of hang out. So we started doing that once a month and it was five and then it was eight, and then it was 12. And then very quickly we realized that these people on this end of the table can't hear those people on that end of the table. Like, we need to figure out a new plan. And then around that time, you guys were talking about the case studies. I'm not good at tech. I'm actually terrible at tech. But there was a template that existed. So I was like, that's easy enough. I can do that. So solicited for people to do a case study. And Alan, who's on the call and I'm sure he'll tell us about it, he did my first one. He did our first case study. That's when our numbers really started to blow up. Is doing these case studies regularly. So we tried to meet consistently on the first Thursday of every month. Then people were like, well, we miss the brewery hangs because that's when it's casual and we just get to hang out, get to know each other better. So we actually kind of started doing Both case study, first Thursday of the month without failing. People told us that the consistency of knowing when it was mattered. And then we just pepper in, you know, a brewery meetup once a month for people who just want to hang out. But it was those case studies when we really started to blow up. Those became very regular. But what started to happen is, and this is where this idea of phi101 came to me is we had somebody presenting. Somebody raised their hand. He's like, that is awesome that you've got a $4 million net worth or whatever it is, but how on earth did you get there? And that's when I realized that our numbers had grown so much and we had so many new people that really just needed to understand the basics. And the case studies weren't teaching the basics. I was talking to Alan about it. I said, why don't we just do a 5, 1 01? I'm like, I'm not good at tech. I can't put this together. I still work part time, you know, like, help. I need somebody to do it. He's like, it's a great idea. I'll do it. I'll do it. So we kind of brainstorm the ideas, but, you know, he's fully behind putting all these slides together.

[A]

Alan, welcome to the show.

[D]

Thank you. Thank you.

[A]

Were you already in the St. Louis group and you were just kind of. When you were excited, when Kristen was like, you know what, let's do something with this group. Or did you find it after the fact? What was your introduction to the community?

[D]

Well, we moved to St. Louis in, I think 2021 for grandbabies. We ended up going to one choose by local event at a brewery, but I think we accidentally crashed a singles 5101 or a group meeting. My wife and I, nobody really did anything with it at that point in time. And then Kristen rebooted it. We saw that. We saw a meeting pop up. So, well, let's go to this. And the rest is history or not. But, you know, we're consistently going every month if we can make it. If we're not traveling with Kristen somewhere, we're always trying to get there, always taking calls from people just, you know, how can we help? We just want to give back. You know, we've been blessed enough to be able to retire early. And now how do we help others do that?

[A]

You kind of went to the heart of it. But I just wanted to point out to people that when you're at these meetups, there are people that are there from various walks of life, but also various stages of their own financial independence journey. And it's always interesting to me, and I'm just curious both of you could react to this, that everybody that's there is not necessarily just someone that is, like, brand new. You could have someone that is completely fi, has been FI for a long time, maybe has all the knowledge and. And still gets a lot of enjoyment from experiencing it from the lens of someone, you know, watching people be introduced to the topic for the first time. And I'm just wondering if both of you could reflect on that, because, Alan, in some way, that is you. Right? I mean, you mentioned it, but you don't need to be taught anything about financial independence at this point. You're not listening to the Choose A five podcast and getting a whole lot of tactical information that you're making active changes to your life based around at this point in time. But you're super engaged in this community. Could you reflect on that? And then, Kristen, maybe you talk to that a little bit as well, because I think that's the magic of these local groups.

[B]

Yeah.

[D]

I think it's really along the lines of, do I get something out of every podcast, every book, every blog? No. Do I get little nuggets every once in a while? Yeah. And then the key is, can I share any of that? Is my life experience meaningful to somebody else who is maybe at that stage in their life where I was 30 years ago? One of our throwaway lines in our case study, when Sarah and I did it, was after 15 years of marriage, we finally hit broke. And I think that resonates with people. We did it all wrong with credit card debt, you name it. So I think as we look at our own group, other groups, our. Our kids, our family, what can we share to help them avoid some of the mistakes or recover from some of the mistakes that are being made out there financially?

[B]

Yeah. And I think this is actually something that we really hit on in episode 596, where the episode was called Mistakes Were Made, it was myself and Alan and Katie Donegan talking about some of the mistakes that we've made.

[A]

And I wasn't on that episode because I haven't made any mistakes.

[B]

$168,000 in student Lond getting everyone.

[A]

Huge getting there.

[B]

But I think this is one of the most relatable aspects of FI for all of us. We have, I would say, almost to a person, I'll say essentially everybody has made a series of mistakes, but yet we're still on this path. Yet we're still trying to live better lives. And it doesn't mean that we're broken or that something terribly calamitous went wrong. It means we're human. I think that actually makes 5 more relatable because you don't have to be perfect from the time you're 22 years old. Lots of us, like you said, Alan, you guys were married for 15 years before you got to a net worth of zero, right before you got back to broke. As Jonathan loves to say, there's nothing wrong with that. That's a life. And look at where you are now. To me, it's just an extraordinary thing.

[C]

I wanted to chime in. When we first started this, it was really just about community. It was just about having friends who are like minded. But as it grew and we started getting new people in that were asking so many questions, I think that's when we realized there's a real opportunity for education here. So it's still very much about community. But here's this great opportunity to talk to people who want to hear these things because, you know, at my job nobody wants to hear me talk about this. Their eyes glaze over. But I'm like, here's all these people who are eager for this information and we want to share it. So it's very much both at this point.

[A]

But Kristen, let's go to your story just for a second because I think, you know, I have the benefit of knowing some of the underlying context for your own personal journey. One of the reasons that community is so important to you, and you mentioned it in passing, but you are working part time. Tell us about that transition and the role that the financial independence community played in that transition and that choice that you made with regards to your work, your work identity, that sort of thing.

[C]

I actually grew up in poverty. I hit broke at age 36. I looked around at my upbringing and was just like this is not the life that I want for myself. So I just did everything to get out of that and go into school. The student debt, all the things started with the Dave Ramsey baby steps, I think, as a lot of people do. But then got to the point where I wanted more, learned about this whole fire movement, immediately started going down the rabbit holes and you guys were one of my first steps was going back and listening to all the choose phi episodes, reading J.L. collins book the Simple Path to Wealth. That was the status quo for a few years. And then I went to my first in person event which was a campfire in 2022. Completely life changing for me, meeting other people who were on this path, for the first time in my life, I truly felt like this is my tribe, these are my people. I want to spend more time with these people. And it's been so life changing. I left my first campfire with my FI date.

[A]

Wow.

[C]

Which actually is July 5, 2026, which is right around the corner. However, when I set that fi date, the thought process was I was just going to work full time and then not work anymore. Well, because of this community, somebody was like, well, maybe you want to think about ramping down slowly. Here's the thing. I'm a broadcast meteorologist. I've been working in TV news for. Well, I actually just celebrated 30 years, Mother's Day weekend.

[B]

Wow.

[A]

Congratulations.

[C]

Thank you. I don't know how I survived this long. It's a very challenging business. But I thought, wow, part time this. Listen, this isn't anybody that my employer, like, no one had ever done this. I would have never had the confidence, first of all, I would never had the idea but let alone the confidence to go and pitch this to my employer if it weren't for this community supporting me. So I did it. And they were all about it. They thought it was a great idea, but they just didn't know how to do it because no one had ever done it before. They didn't know how the benefits was going to work out. Anyway, fast forward two years later, I'm working roughly 10 days a month. I got rid of all the stuff I didn't like about my job. I still have a toe in. I've been traveling more. I've created a group fi friends travel, where I actually take people in the fi community on trips around the world. I know Alan kind of alluded to that earlier. I've created this amazing life for myself and 100% of it is due to this community.

[A]

And you didn't have to choose between your work arrangement and your fire date or did you have to adjust your fire date in lieu of that choice.

[C]

So at this point, I'm just in flux because what I'm doing right now works. I'm traveling as much as I want to. I'm not working too much. I've just got my toe in enough that I still enjoy it and it feels good. So at this point, I'm in a situation where at some point it's not going to work anymore. I don't know when that's going to be, but when it doesn't work anymore, you know what? Maybe my employer says, kristen, if you are traveling too much. This just doesn't work. And you know what? That's okay. But right now it works. So I'm just going to keep on trucking until one day I decide it doesn't.

[B]

Yeah. And this is really one of the beautiful aspects of FI is you had a plan in 2022. You said, sure, July 5, 2026, I'm out. But you adjusted and you pivoted and you, like you said, Kristen, you came up with something that your employer has literally never seen before. And I can't. There's so many times I've heard people say this. This is the epitome of. Of fu money in the best possible way. Not in the going out in a blaze of glory, screaming and yelling at people. It's the. I have some power that nobody else has ever wielded in the. In the history of this company. And again, it's not in a negative way. It's in a win win way. You're. You've been there for 30 years or you've been in the business for 30 years.

[A]

Right?

[B]

Like, you have great knowledge and institutional knowledge. People know you undoubtedly in St. Louis.

[C]

I've been on the air in St. Louis for 18 years. So, yeah, people know me just a little bit.

[B]

Just a little bit. How cool is that that you were able to make this pivot and if there's no overriding need to leave your job, you don't have to leave. I think this is so important for people to hear. Often it's this binary. I'm FI and I'm just going to go and leave my job. I can never earn another dollar or I have to work full time. And that is just such a lack of imagination that I find with people and hearing people stories make the world go round. So hearing your story is undoubtedly going to. To have that light bulb moment for somebody where, like, look, it doesn't have to be 0 or 1, and I'm not failing at 5. Like, by any measure, Kristen, you are rocking it. You've built this amazing group. I. I do. It's funny because I just called up your website, so it's fi friends. Plural. Friends. Travel. So 5friends travel.com. you created this in the last, what, year or two? And I think, what do you have, three or four trips a year, something like that, where you take an entire group. I know Japan, place that I is near and dear to my heart is coming up on your radar. This is the coolest thing ever.

[C]

I launched the website in September 2024 and honestly, this was at the urging of some of the folks in the community. I wouldn't have done this, but I had an idea and I was talking to them at Economy about it. They were like, do it, do it, do it. We'll support you. And then they kept prodding me and next time they saw me they're like, what about that thing? What about that thing? So at this point I have over 1000 people on my email subscriber list. I can't even believe it. It's been so successful. This was something that I created that I wish existed because I want to travel. These are the people I like hanging out with. And there wasn't anything that existed like that. And I was already putting together small friends groups to do trips because I want to travel more than my husband. And he's like, go with your friends.

[A]

So I have a travel group you could go with, that'd be great.

[C]

I'm like, why not? You know? So I launched the website Five Friends Travel in September 2024. We do three big trips a year. We've been to Portugal, we've been to Morocco, we've done some river cruises. I leave in early June to take a group to Turkey. And then I think you're going to

[A]

have a few more subscribers after today.

[C]

Well, honestly, I'm like, I'm creating a problem for myself because now they sell out really, really quickly and people are mad and I'm like, oh no. So we're going on safari in October and there was so much excitement in demand. We're having to do two back to back safaris with different groups a la campfire. Right? Week one, week two, week three.

[A]

This is amazing.

[C]

And this is what's happening with Japan too. I know how many maximum SP thoughts I have and I have at least that many people who've already said I really want to go. So I'm like, oh gosh, now I have to do two back to back. And how am I going to make

[A]

this world, this whole thing separately? Chris, it sounds like there's a lot here, but I just wanted to point out for the community that maybe you said this online and if you didn't, it was certainly right before we got started. But you basically led with, I'm really bad at tech, I'm terrible. Okay? An identity statement that maybe needs to be reevaluated, but still these types of belief systems keep us from trying. Now there's two things that change it for you, because you did it anyway. Just do it anyways. But the reason that I wanted to point the reason that we're here talking about it versus, oh, the idea I had two things. One, you're the average of the five people that you spend the most time with. You have radically changed your 5. And what went from oh, I'm bad at became, well, what would be the worst that could happen? Let's just, let's just give it a shot. Anyways. The other thing is that time, which is most people's enemy and it's just. There just is no time. You've already reclaimed, right? And the financial pressures of, oh, anything I put energy into has to be. Has to return money. That fear, that concern has gone away. So you don't need to be driven by, you know, revenue or anything else. And this has allowed you to design your life by Brad. This was episode 598. I had so many thoughts like, organize them, organize them, organize them. Brad just did this episode598 with ginger. And in this I haven't had a chance to listen to the whole episode, but I was looking at it as I was kind of doing some back end setting it up. And I remember he was talking about. In this episode, he spent an actual pretty significant amount of time talking about individuals needing to reevaluate their career choice through the lens of where they are now versus where they were when they initially made the choice. That really resonated with me. There were two aspects of that. One was that, no, you don't have to walk away from your job. In fact, Kristen, you just pushed the envelope on that. But what I thought Brad made the point there that was so impactful and I think it stands up even now through this inspection, is that you need to be at the point where if you make the choice to stay at your job, it's because you love it. You love it. It's. What is it bringing into your life? Because you can custom build anything you want as you start to get this power in your life. And so now the job no longer being that anchor, that millstone around your neck, that is the thing that you need to get the energy from, to recoup from in the weekend is a part of what brings you energy. And that changes the confidence that you go with into work. It changes the relationships that you form at work. It changes everything. And I just think that what we're seeing in your life, you know, really exemplifies these principles that are the natural outflow or inflow of being around this community.

[C]

Having the fu. Money is really powerful, right? And understanding how all this works. But I Cannot stress enough. It's being around other people on the same path. Which is why creating this group and going to these in person events are 100% the reason I've been able to create this life. Because I would have never even had the idea or the courage to do any of this.

[B]

Yeah, it's so important. And just to be clear, if you're listening to this and you're not a member of a choose if I local group, just go to choose a vi.com and in the upper right corner there's login, slash, register, something like that. Jonathan is constantly changing the button. So I'm not sure what it says at the moment, but you can create an account and it takes 30 seconds. You just say, hey, what's the closest city or town to you? There are many, many, many hundreds of local groups all across the world. And if there's not one in your area, you can create one. Like Kristen has said repeatedly, I created what I wish existed. She did that with the St. Louis group, rebooting it, and with five friends, travel. Alan, I wanted to pivot to you and that freeze, I created what I wish existed. Is that something you've ever thought about in your own life as you've progressed down this path to fi.

[D]

Like I said, I think I want to give back. And a lot of that came from teachers early in my life, high school teachers, particularly growing up. I grew up in poverty as well, grew up on a farm. I realized very quickly this is not what I wanted to do with the rest of my life. You know, we went to college, got a degree, got a degree in accounting and used that to springboard a career that allowed me to combine a couple of my passions. I love numbers, I love finance, things like that. But as I grew my career, I was able to teach a lot of people as well. So it wasn't always I'm just sitting in a room with a green visor, hit my calculator for 18 hours a day. It was, how do I teach the next group of people to do what I do? We always had this thing at work where people would leave. I mean, there wouldn't be growth for them at that particular time. But our goal was always to train people to go to their next job, whether it was with us or the next company. Because not training people, you get exactly what you end up with. Our entire group was always about, let's learn the next thing, let's teach somebody something. I've kind of stuck with that. And since I've retired, it's Been the same thing. It's like I'm always available for a call if somebody wants to talk through a situation. If we're doing these 101s and 201s and nothing is better than having someone come up to you and say, after the 101, we went to a bar. That's kind of what we do sometimes. Somebody came up to me and said, I think you might have changed some lives today. And that kind of gives you goosebumps. And you go, okay, now I know I'm on the right path here.

[A]

This is fun and it's gratifying on multiple levels to get a chance to have this conversation with you. Because when we're doing it just between the two of us, the feedback loop is there's space in between it. And just seeing how you've been able to realize this in your own communities is really rewarding to get a chance to hear. I wanted to focus on the Phi 101 and I'm trying to remember now, Kristen, I know, you know, you were kind of giving us a little bit of the setup for how we got here. And you mentioned you started out, you know, in the brewery, very casual. And then kind of maybe around the time that Brad and I were starting to kind of kick things up a little bit and, and talk about it again on the show, you move to the case study templates and you see a lot of enthusiasm. But now, and rightly so, I mean, let's be real, let's just call it here. This community represents the stealth wealth community inside the United States. This is the entry level, you know, middle class lifestyle, but it kind of hides. It's a, it's a veneer, a very thin veneer behind an incredible amount of wealth that is aggregated when you don't spend everything right up to your eyeballs. And so there's a lot of millionaires in this community, a lot of them. If they've been on the path for 10 plus years and they've been maintaining a savings rate, yeah, there's a lot of multimillionaires inside this community. What's amazing is how much they're benefiting, because they are. This is the pattern that they followed. You're the average of the five. They're curious, they're ongoing learners. They tend to be out performers in many ways and they've found each other. But now, and this is what we always hope for. So this is absolutely the natural outflow of this. You don't want to put your arm up and say, this is for only the people that get it. This is only for the people that just. This comes easy to. This is only for the accountant brains. This is only for the, you know, the spreadsheet nerd. No, this is for everyone. And so through this lens you want to invite new people in and having anything to do with optimization and a million plus dollar net worth is as far away from relevant for them as you could possib imagine. And so we're not talking about capital gains harvesting at this particular stage. It's not, it's not even, it doesn't even need to show up. We're not talking about backdoor Roths. We're not talking about all these Roth conversion ladders, XYZ tax schedules, marginal effective. At this point, we're starting with, in my opinion, we're starting with a why I would like to take this opportunity to actually spend a little bit of time getting your input on financial independence. 101. Brad spent a lot. Brad and I both spent a lot of time, both this year and over the years, brainstorming what this should look like in our minds. But you're teaching it and you're deciding ultimately what you think for your community is going to resonate the most. And I would be curious for both of you and maybe start with you, Kristen, how to kick this thing off. What are the concepts and the principles that you, you wanted to convey to that person that maybe can't relate to the million dollar plus net worth and is like this is my day zero.

[C]

We really noticed in the last however long you guys have been talking about going online and joining your local group that we were getting all these new people. That's really kicked that off for us. And that's when I realized these people just need to get, they need to know the basics. They were asking questions that made it very clear they needed just the basics. So that's when I mentioned to Alan, you know, I have this idea. Let's teach that. Let's put together a course. But again I say I'm not great at tech help. And he's like, you know what, I'll take it on. So we brainstormed the ideas, but really he kind of did these slides. So I'm going to let him kind of jump in and talk about what this looks like.

[D]

It really was. If I were to look back and say what would I have liked to have known 20 years ago, 30 years ago, and trying to figure out what to do with my next dollar, not spend it if I have a dollar where should have Gone listen to a podcast, the money guys, they had the financial order of operations, so we kind of based some of it off of that. And then we also used the pillars of five from your guys podcast. So it really helped develop. If I have a dollar a gap from what I earn to what I spend and there's something left over, where do I put that? And backing up, I think we may even need to go back to maybe a personal finance 101 in some cases, because we do have a lot of folks that are brand new to trying to figure all of this out, and they might need some help with some of the very basics. But as we were putting this together, we knew we had a fair amount of the crowd that was new to our group, and turns out we're new to fi well. So how do we convey, I hate to say how simple it really is, because I think all of us understand that the math is easy. There's no issue with understanding the math. It's that space between your ears that really gets in the way of everyone and everyone's Phi journey in some cases. So how do we make it simple? How do we break it down and try to get, all right, you're just joining this path. What should you do first? So that was the basis of most of the presentation and trying to figure out how to convey that.

[C]

Alan, and your very first slide is what is financial independence?

[B]

Yeah. And Kristin, this, to me is the question, Alan, as you're envisioning these slides, I love your concept of what's the first step you take? Because really, it's going to be about the numbers, it's going to be about the action. But what's the hook? What is that? North Star for somebody? Why would they want to do that? I guess that does get to what is financial independence, but how do you emotionally get them involved in this?

[D]

Everything I put in these slides is entirely original. I think it was all stolen from somebody. So I looked at a few different variations of what is financial independence, and I, you know, the first one we chose was you get to maintain your lifestyle without trading your time for money. So that was the one. I think it might have been Stephen Boyer, who I saw his 5101 presentation on YouTube and that one resonated just because everybody has this mindset of, I'm going to work until I'm 65, I'm going to retire and do whatever, but if you can do it earlier, you should. You've got a lot of life to live, even at 65. But if you do it at 55 like I did, or if you're going to do it at 45 like a lot of the community has, why not? That's the. I don't want to call it the hook, but if you can live the life you want to live and somebody doesn't have to pay you to do it, then why not?

[A]

Yeah, I think you, you've nailed something there that I'd like to spend a second on. And that is one, that tie between the two, which is somewhat artificially made. Most of us can only afford the life that we're currently in if the job continues bringing the income. And so that hook there, people don't realize that thread, how deeply it's woven in, and they don't realize that there is even a way to separate that at a much earlier age. And then the other thing you said is, I'm actually going to push back on it a little bit. But you said, you know what, maybe we even need to personal finance instead of five. I think no, I think personal finance has failed for one very singular reason and that it has no why behind it. It has no why behind it. Everybody takes a look at personal finance and rejects it because it doesn't provide a significant enough reason to look further. There's no psychological hook, for lack of a better word, for anybody to take it, quote unquote, seriously. And so you can just start throwing identity statements on there like, oh, I'm not good with money, etc. When you have a why? All we're really doing when we're talking about it, 5, 101, as opposed to PF101, all we're really doing is saying, let's put your why first. Now we have a definition here, but why do I want to be able to separate out the life that I've chosen to live from my current job? Why do I want to do that? And now as we kind of explore that a little bit more, people can put their own values and reasons into that. Said differently, if I didn't have to work ever again for money, what would my life look like? What would I do with it?

[C]

And he puts it on the first slide. He literally is like, you can travel, you can do whatever you want.

[A]

Have you had any conversations with people that are inside the community, inside of an event like this, saying, what would be your why? I think it's easy for us to throw like a platitude on there or just some sort of lazy statement about what we would do, but for individuals to take a second out Loud in front of these, a group, you know, where there's some level of accountability and you're not just talking to other people. Can hear your words, you're actually reflecting out loud. What would my life look like if I were going to start over with the information that I have now or what would I want this future to look like? And why? Is an incredible thought experiment for a group to share out loud. And then you're going to be at individuals that realize, oh, I'm already there, but are you living it?

[C]

Alan, take a note. This should be one of our meetings. We go around and we ask everybody in the room.

[B]

Seriously, no joke. I just got chills hearing Jonathan say that. That is an event that has to happen.

[D]

Yeah.

[B]

And that would be incredible because again, stories make the world go around. And also you, you start to hear, okay, what is someone else in my real life in this room? What are they thinking about doing with their life in Phi Jonathan, you might have just hit on the third leg of what we have case studies. We have 5, 101. We have this. That's critical.

[A]

This has to be the conversation to get started with. And Kristen, I'm just going to throw you out there. I think part of what makes you so appealing as this community organizer is they can actually see you living this out. I mean you can point to the line items about how you have through the lens of what you want your life to look at. Everything else just kind of slots in. You have a pretty strong why you have a pretty good vision for what you want and when it didn't exist, you had the time. So you just build it.

[C]

Yeah.

[A]

And then people that, that's attractive. That's attractive on multiple levels for people that realize, well, I don't have any of that control in my life. I am tie. I'm up to my neck with obligations that I've just had, never evaluated and really don't even know how to start to unwind. Right. So through the lens of this, what do people want? Well, they, yeah, they want more autonomy, they want more control. But that also requires a thought experiment because if you haven't done that and it's free to do the exercise, but it's also, it's not just a free easy pass. Watching Netflix is, is simple. This sort of thing actually forces a lot of trickle down thought and your thoughts are more coherent in front of other people and they're also inspired if you're just drawing a blank and you're hearing a few other people from various stages. Right. If Everybody, that was just fine. Just say, I just catch up on Netflix. Finally, we're done, right? Where are we done? But that's not the case. It's simply not the case. And it's the aggregate of the life that was built from reclaiming the tithe that makes other people like, oh, man, I'm not dreaming big enough.

[C]

I think there's a lot of people who actually struggle with what to do with all this free time. Like, this is something my husband's actually struggling with right now. We're having conversations about this. Being in a room with people talking about what they're going to do could be really inspiring. Yeah, we got to do that for sure.

[A]

What I'd hope for this conversation and for the ones I know will do, following up on this is that we kind of iterate the whole thing. Like, we'd love to have you back on to help us think through these various aspects, but we did iterate what comes out of this. You know, what is the blend of the why with the tactical appropriate for the stage that someone finds and find themselves in, and maybe the Persona that they are as well. Because if different people come in at different places with different emotional baggage, different things, stigmas around money, different life circumstances which make their journey completely different than maybe mine or Brad. So the. That's what makes it compelling. That's what makes this. It's not that my life looks exactly the same as your life or Alan's exactly the same as your life, but it's that you want to see your community winning. And you also know this person that did win, you have someone else that needs that information as well. So if you can see someone else win, if you can glean from them the action steps that they took, that immediately gives you something to go help someone else that you know with that same information. So, as a community, we're interested in patterns because we know if they don't work for us immediately, because we're already past that stage, there is someone else that desperately needs that information. And if we can just promote the conversation, it can trickle down and help those that maybe we love. Closer than the stranger that's just telling us about this for the first time that we just met. Yeah.

[B]

And it all starts with action. That's what we've always said is the hallmark of Choose a Fire is you have to take action. This is not just a passive endeavor. Okay, you're listening to this podcast right now. You're listening to the four of us talk about this. You need to sit down and no matter where you are on your path to Phi. And you need to think about, hey, what does my life look like post fi. That's a really interesting exercise that can be done on the individual level. I would love to see this as. Because that's. The next action is if your local group is not doing this. If you're hearing this and your admin, your local admin hasn't said, okay, this is an aha moment yet, bring it up. You can be the change that you want to see. You can create that event. It has to start with individual action, though. That's to be. No matter who it is, there is one individual that is going to take action on this and start it. That. That's just how the world works. The world works by individuals standing up and saying, I want to be the change that I want to see in the world. And I just love Alan, Kristen, that you guys, you two have been the change that you wanted to see in St. Louis. Again, FI is not this passive endeavor and FI is not just about the nuts and bolts of money. If it was, we would not be doing this podcast anymore. This would be a five, five episode podcast short and we'd all be done. This is about a constantly evolving mental framework. And as Kristen has said repeatedly, it's about community. It's about creating the life that you want to, whatever that looks like to you. We have millions of people worldwide in this community and no person's path looks the same and no person's ultimate aspiration of FI looks the same. And I don't find that a limitation. You find that exhilarating. I think that's what's so fun. And not only that, but you're going to find your own concept of Phi changes along the years. I talked about this with Alan and Katie Donegan recently again in that episode where all three of our paths to FI have changed dramatically even once we've reached fi. That's not a bug, that is a feature.

[C]

You mentioned the nuts and bolts aren't all that important, but at the same time, when you've got new people in the community, they need the nuts and bolts, right?

[B]

Absolutely.

[C]

After we sort of address this whole idea of like, what is financial independence, we go to what I think is the next most important step. And I think Alan said the math is easy, but a lot of people just don't know the math. You don't know what you know, right?

[D]

Well, 25 times.

[C]

Well, then we jump into, I think the article that so many people in this community know and hopefully you'll reference this in the show notes for people who don't, but Mr. Bunny mustaches, the shockingly simple math of early retirement. And that's right where we go next. Alan?

[D]

Well, I think going back to Jonathan's, why I think of three things, obviously, the expense audit and the value matrix. That's. I mean, if you want to know why you're spending what you spend on, go through that. That's an exercise you should do. Sarah and I did the Donegan's Extraordinary Life event in Richmond. Highly recommend looking at that wheel of life and ranking those nine areas in your life that will give you some direction on where should you go next. And then lastly, and I say it, and I know all the St. Louis people are groaning right now, I say it at every meeting. Do a case study. You don't have to present it. Fill it out. Look at your history with money. Look at where you're at today. Ask yourself the questions that you would ask the group. And whether you present it or not, that's up to you. But at least you can walk into the next meeting with some questions that you can ask somebody that you know has probably gone through it.

[B]

Alan, I love that concept of, of just doing your own personal case study, regardless of whether you ever present in front of your local group or not. And Jonathan, this is another thing that we actually have, the PowerPoint, the, the case study template in the new platform that you created. So can you tell people basically where they can find all of these resources? Because I think sometimes people have some questions this.

[A]

Yeah, we're gonna have to think through what's the best path. What we've tried to do is give local admins their set of resources, their own set of resources that they can share and choose and use however they want. All admins do have access to the case study template. All admins do have access to the Five101 presentation that Kristen and Alan are continuing to iterate over time. What I am trying to do, and this is the ongoing effort and this is why I think it's communicating with Kristen and Alan and other admins to see about, you know, how they want to do this. But I would like to be able to set it up so the local admins can run their own cohorts and allow members to track their journey inside the community app to the degree that it's helpful for the admins and for the community members. So, for instance, if Alan mentioned the value matrix and the. And the expense, we'll talk about that in a little bit. But if someone chooses to do that, they could have a button to say, hey, I'd like to submit my information to be a case study. And that local group could then, you know, have the separated out information and actually go through that various exercise and use it. So it's all baked there talking about moving everything a little bit forward and making a little easier. The flow here should be teach, right? And then there's a practical exercise that's standardized that individuals can do it, they can do it on their own, they can do it paper. But to make it easier for the admins, especially if they want to go through the case study process, they can do this in a centralized place and just submit their numbers to be used as a case study. And so they could then take this case study and then do that in a follow up meeting. And so really the key to all this is just for individuals that like that idea and admins that want to move in this direction. I'm going to be coordinating with Kristen and Alan and anyone else, any other admins that want to be a part of that, to figure out what would make it the easiest. So they have these tools but we need to speed everything up so it's just simple and intuitive and that it builds. So for instance, imagine once a year you did a reflection about your why of financial independence. It's non destructive. The next year you go in and you have that and you update. How does your why change over time? Maybe your first one was a platitude, but it became more valuable. And you look how your why changed in terms of a group going through a cycle over 10 years. Imagine where you'll be 10 years from now. How does the building of that track record, you know where. Okay, let's, let's refute how is our why changing? Have anybody thought through that? And it's not that everybody will do it every time, but it's that. Here's how, here's what's changed. Here's what I've realized as I've been able to. It's not just a platitude anymore, it's not just a vision board anymore. It's actually the next phase of my life is starting in three months because I had this date that I just threw down based on simple math. But guess what? The math worked and now I'm accountable for being on the other side of this. And here's what I've realized in between now and then. I actually wasn't looking to completely leave my, my job. I just wanted a job that was part of my life. Not a life that fit into the scraps that was left over after my job took everything. Okay, all right. What does that mean? And so this is the sort of thing, what we're going to want to do is for individuals that really want to have this ongoing track record of small actions leading to powerful results, we want to give local admins the tools where they can work with their community. And I'm going to. I'm committed to working with Alan and Kristen, all the other local admins that want to see this happen and do it with that in mind. I've been working on what I believe is just stages, and you may have heard me talk about them, but I just want. I think it's really useful as we get in here, just to explore this. I think there's five stages of financial independence. I think there's this discovery phase. You guys were doing a meetup at a brewery, and the person down on the end heard that you were all here. Now say, we're in a local financial independence group. And they're like, what, what's this? And then you have this. Oh, yeah, well, this is what we talk about. This is what fia. And that's a thing people do that. We've all experienced a version of that, right? That's discovery. In the first time that someone's getting introduced to this, everything is new. Everything is new. There are just a couple concepts that, if really dialed in, change the paradigm for that person's future entirely. And we touched on them, but I just want to hit them. Like, if I could just get one, if I could just have, you know, 20 minutes with an individual. What I'm going to want to hit is the definition that we just talked about and then the power of savings rates. You just talked about it. The shockingly simple math, the 4% rule as a starting place. And I'm going to want to make sure that they understand what a financial independence is. How to calculate a rough financial independence number, how to calculate a savings rate, and why it is the most important thing. It is more important than your income. It is more, you know, if you are spending 100% of what you make and you make a million dollars a year, you are going to be working decades longer than that person that's only making, you know, 50 or 60k a year, but is only spending 30 or 35, they will have separated their time for their money, decades ahead of you. It is not about income. Obviously, all of us understand there's an advantage to making a million dollars a Year. It's not the point. The point here is that if you spend right up to what you make, you have no options. Right. Unless you can cut your spending. So we're going to think about our life through the lens of separating our time from our money. We're going to move in the direction of conve. What is a financial independence number? How to calculate your rough financial independence number? Why a savings rate is so critical. How to calculate your savings rate, that is discovery. If you can go farther, go farther. But if someone feels good about that, they have already moved out of the first stage of financial independence. And we are now moving broadly with as much time as we have left. And to what I know we're going to be talking about here, which is awareness, which says, forget about what it is. What would it look like for my life? Awareness is not about judgment. Awareness is not about changing anything. Awareness is, at some point you got to step on the scale to see where you are at. You can't avoid it until you have that moment of, all right, I know all those numbers. And so, you know, Alan just mentioned it. The expense audit notice how far down the road before we start looking at income and investments and net worth, we are starting over here and something that everybody should be able, able to do regardless of financial acumen. It's just, all right, I've discovered it. And now awareness looks like me, you know, taking a look at my life, my current picture, and putting it into a series of easy, simple exercises without judgment. And then from there, now we can calibrate and figure out where we are. And so I just think, you know, that simple framework, however local groups choose to implement that, and we're going to go through these slides to see what happened. I think what's probably happening in a 5, 101, Alan, I'll give this back to you, is that we're probably, you know, because we're doing it in one session, we're thinking through what is the best use of that 40 or 50 minutes that we have with these individuals to get them as far down the path as possible. We're starting with the why, then we're starting with the big concepts. And now we're trying to give them a few insights into the actions that they're going to do when they get home.

[D]

Yeah, I think, you know, when we say, what do I do with my next dollar? That is where we targeted the financial order of operations. We said, you better have an emergency fund, just a small one. You don't need, you know, six months of Living expenses in that fund. You need to be able to fix a tire. If you're at the stage in your life where a flat tire or a blown out tire is going to cripple you for months, you need to start there. That's probably as far as you need to go for as long as it takes to get to a few hundred dollars in that account. Then we talked about the employee match, eliminating high interest debt. Where do you go with that next dollar? Ultimately you're going to start investing it. You're going to put it into your 401ks, your IRAs, your HSAs, all of that. But I think a lot of people who came for the first time were probably on stage one, they had a dollar and they wanted to understand what do I do with it? And then after we talked about that, we took them to the Pillars of Phi. Old school. Pillars of Phi. I mean, I can't even remember what episode it was, but it's been a while.

[A]

That was our first and most popular listicle.

[D]

I made one change. I think you guys had cut the cord and cell phones as a bullet point. But I put in the expense audit because I think that's as good as it gets at this point.

[C]

The other change was instead of VTSAX and Chill, it became VTI and Chill.

[A]

The natural evolution.

[D]

Exactly. So we didn't spend a ton of time on any of this. I think we spent more time on VTI and Chill than anything. Because we all know that investing those dollars is really the only way to get there. You can't save your way to fi. It's just almost impossible no matter what anyone says. Unless again, you have that million dollar income and you only spend $50,000 and then it only takes a year or two to save up. And you're probably there.

[A]

I like what you said there, but I think I should. It's not even pushback. I agree with you. Let me just front run this. I agree with you. But I think that's confusing for individuals to hear that when someone were to say to you, you can't save enough for five. Like, you know what I mean? Like, like huh, shouldn't I be. You just had a savings rate. It's the most important thing. Help me understand through the lens of someone that's coming through a 5, 101 what you mean by this idea. Well, you know, I just save. I'm just, I'm a little squirrel and I just tuck it all away and I just save like, you know.

[D]

Well, as the prelude we did 201 recently and that was one of the questions. We know the inflation rate is roughly, I want to say three and a half percent. I think I did that one over, I want to say 50 years. And we basically came back to. So if I started with $1,000 50 years ago, the inflation rate would blow that up to about 6,000 bucks, give or take. Now if I wanted to save, call it a high yield savings account. I used one year T bills as an example. That was close to 5%. So that 50 years that blew up into almost $10,000. So very small gap there. 4,000 bucks over 50 years. If I were to take that thousand dollars and invest it in the s and P500 over those 50 years, it was almost 12% that blows up to 392 or $292,000. So I could save and have an extra four grand over the value of inflation or I could invest and have an extra $280,000 over the value of inflation. Yeah.

[A]

So your point here is that fiscally responsible is not enough. It's a very good starting place. You have an advantage. But if you're just fiscally responsible and you stop there, I spend less than I make. Directionally you have advantages, but mathematically you're not going to be happy with the outcome over a, a long period of time. And that is also a mindset shift because I think some individuals would, would say out of fear. I just don't want to risk it. I don't want to. That sounds too risky. I see Bitcoin and I see all these people losing money in the markets and I see red flags everywhere and I see CNN in the morning and I see Market Watch and you know, some why would I want to put my money there?

[C]

And we spent some time on that a little bit later in the slides we talked about. I really went in on some of the things that J.L. collins talks about about getting people comfortable with the market. But before we got there we just gave a bunch of examples of like Alan did, like what your money could grow to if you invested it. But we also really started digging into the fees part of it. And I think that really opened a lot of people's eyes because we gave them the example if you just put money in VTI versus if you paid an assets under management or if you paid active fund management and just how much over time that that would decrease what you could have.

[A]

Yeah, you're, you're hitting a, both in on something here when you're talking about and you know, you kind of think, where's the perfect place? Well, you're going to find out after you've done this and after you've seen what resonates for people and what people need at that particular point in time. And I do think that the projection charts are hugely impactful and help lock in that your why could actually be possible if you optimized it and if you knew the playbook. And so I don't think it's just, hey, six months from now, now we'll talk about investing. No, you need to bring some of it forward. We need to show that it's not just a dream, that this is actionable and practical. You can realize this in your own life. And then I think there's one piece there that's massively important. It should be said sooner than later, and that's that the fees matter. And it's not just that the fees matter. It's that I think a lot of people, when they hear you need to be doing good with an investment, Brad, I'll give this to you. I know you're just gonna have fun with this one. But the fees, the next thing is, well, you know, I got a guy or I know someone that has a guy or maybe I need. Or gal I know someone, right? I know someone or they know someone. Maybe I need to know someone. Like, who's your person? Is that. Is that. Is this is, you know, do I need to find that secret person that can beat the market? And, and I think that's a big limiting belief because I can't do this myself. I'm not smart enough, and so I probably shouldn't try. Brad.

[B]

Yeah, you really teed that up for me.

[A]

Pretty good building, like, you know,

[B]

spontaneously combusting over here trying to get. So, yeah, I've got. So I have three different things that just came up that are, I think are all really critical that tie into 510 1. First, as Alan said, it's essentially the opportunity cost of not investing. Like Alan said, it's great to save, you have to save. You need a savings rate. It's critical, but it's not enough. The perfect example is you've managed to scrimp and save a hundred thousand dollars. You essentially stick it under the mattress, right. Or stick it in your freezer. Okay, well, that hundred thousand dollars 36 years from now is going to still be worth $100,000. Okay? Nothing terrible has happened to it. You haven't risked it. Right? But it's still sitting there. It's $100,000 now, whereas if you put that money, you invest it in the stock market in what we believe is the highest likelihood of success is low cost, broad based index funds. I think it's reasonable to expect an 8% annual return. There's this concept called the rule of 72, which basically says, all right, I take this number 72, I divide it by my expected return and that gives me the number of years it's going to take to double. 72 divided by 8 is 9. All right, so every nine years you expect that money to double. In nine years, 100,000 turns into 200,000 and then another nine years later it doesn't go up an extra a hundred thousand, it doubles again. So it's 400. Then nine years later it's 800. And then at the 36th year, it's $1.6 million. You might have just stuck it again in the proverbial freezer, which for most people is sticking a checking account or like a, in the old days, an online savings account that gave virtually nothing. Okay, well that's safe and it feels good. But the opportunity cost is actually potentially one and a half million dollars in this instance. All right, and that is staggering. Now, does that mean that there aren't going to be times where your money, your net worth goes down 30% in a given year? No, I can't tell you that at all. In fact, I can almost guarantee you over a 36 year period, there's going to be a year where your net worth goes down 30%. Certainly where it goes down 5, 10, 15%. Volatility is guaranteed. But over the long run, we believe this is, and all of history suggests this is the highest likelihood of maximizing your net worth. So that opportunity cost concept is really important. Also, people are looking for the nuts and bolts of how do I actually do this? This is the golden age of investing. You can go to almost any platform. We specifically like Vanguard, Fidelity and Schwab. But there are many, many, many other options. Kristen and Alan said VTI and Chill. Now, VTI is Vanguard's total stock market etf. This again is a broad based, very, very, very low cost fund. In this case it's an etf, it's not a mutual fund. But the distinctions are very, very minor. At, at all of those brokerage houses that I just mentioned, there are going to be no commissions. So you can buy this for basically just the cost of the etf. It's probably a couple hundred dollars a share. Now you can buy fractional shares just about everywhere. It's not like Jonathan, when you and I started Choose a Pie, there were limitations on vtsax, which was a mutual fund. You needed. At one point you needed $10,000 to invest in this thing at. For a very long time it's been 3,000. I think that's.

[A]

Yeah, you're probably right.

[B]

There used to be like the admiral share and then the whatever that's gone. That doesn't exist anymore. So there's no cost for these things. That's the beautiful aspect. And Jonathan, to actually get into your question, understanding the cost of fees and why we love things like vti. And again, this is not financial based. I'm not saying the only thing to invest in is vti. There are plenty of broad based index funds that essentially mimic the S&P 500 or the total stock market index. I think it's very, very hard to go wrong with either of these options. We like vti, which is Vanguard, but you can buy that anywhere. You can buy that at Fidelity or Schwab or Robinhood or wherever the heck it is you, you happen to have a brokerage. So here's the example. I created this a very long time ago on my old site and I basically said somebody had that hundred thousand dollars saved up and they continue to invest $1,000 a month. All right, for somebody in the fight community, that's not unrealistic at all. In fact, that's probably on the very low side for a lot of people because picture even a couple making $100,000, which is, you know, two people making 50 grand, that's a very middle class lifestyle. This is a 12% savings rate. So just to set the stage, I don't think that's unrealistic at all. Now I said basically, they're investing for a lifetime. They're investing for 40 years. I need to update this, Jonathan, but I assume the 9% gross market return. Now, I suspect today I would say 8%. But nevertheless, if you had that a hundred thousand dollars invested and you saved a thousand dollars a month after 40 years at a 9% gross return, you'd have $7.2 million. That's incredible. $7.2 million. Now if you went to a financial advisor who had this assets under management fee, this aum, which I think is one of the most insidious things in all of personal finance, they're going to charge you about a 1% fee. That doesn't sound like anything. 1%. Oh, it's nothing. But your 9% gross return actually then goes down to an 8% net return instead of that $7.2 million, now you're left with about 5.3 million. So you have lost $1.9 million to fees in that scenario. And that's if they invest in any very low cost index fund, which is highly, highly, highly unlikely. Now naturally I didn't give the, the exact specifics of there's a couple hundredths of a percent of fees that's negligible. But where we get into it for real is that Financial advisor is not going to just put you in vti. They're probably going to try to prove how brilliant they are and put you in an actively managed fund, which probably will have another 1% fee. So again, your 9% gross return now goes down to 7% because the 1% advisor fee, the 1% mutual fund fee. So you're at 7% net return. Your net worth at year 40 is not 7.2 million, it's 3.9 now. So you have lost $3.3 million to fees. That's what we talk about when we talk about the importance of fees. There's no way, and the final word on this, and the upshot is over 40 year period, almost nobody is going to be able to beat the market. Market in our estimation, the best you can do is to match the market. Therefore finding this advisor who's putting you in this fund, there's no way they're going to beat the market. So therefore this is a terrible decision in terms of expected value and just from, in terms of just a bet on what is the highest probability of maximizing your net worth. And yeah, the proof is in the pudding here. These fees cost you $3.3 million in this scenario. And that's staggering.

[A]

And it's not just Brad's opinion, you know, it's just borne out by like the facts over time that there are virtually no mutual funds that over a 40 year period of time have in a statistically significant way outperformed, you know, the market. Just the fact that you are likely picking the winners when you go to, you know, Morningstar Reports and picking the best one, well, that's who outperformed last year and the year before, maybe the last five. It almost puts you at a disadvantage going forward. And so, you know, you cannot control the performance and to some degree, probably the managers can't. But what they do have to do is they have to be more creative so they have to make more decisions, which means more taxable events, which is going to put that, put you at a disadvantage there. And there's natural, you know, kind of selection on these things. So you're always seeing the ones that did the greatest. But it's almost kind of self cleansing and that the ones that actually drop off, you never really get that exposure. You only have, you don't get to go back. You're making, you're thinking in bets, you're looking at probability. And so you're saying, okay, if I look at history, what has happened? Well, you can't control their performance. Completely unknown, you're just guessing. But what you can absolutely know, and this is Brad's point, you absolutely know is you know the fee structure. And actually some of you don't. And that's a big problem once you become aware of the fees and you understand. Okay, that actually does. Yeah, my, my advisor sent me a Christmas card. He better darn well have you kidding me? You know, he said a Christmas card with him and his. But yeah, I bet he did send it. You know, the fees are going to be there whether they do well or whether they go down. It's just you're, you're going to pay those fees regardless of performance and those fees are going to sting even more when the market is down 20 or 30%. And because you were maybe in some riskier stuff where you were getting those outsized returns earlier, now maybe you're down 40 or 50%. You just, it's just something to be aware of that controlling the fees, that's all you can really control. And if you can just keep up with the market over time, you're going to be very happy with that. Alan and Kristen, I've asked you guys ahead of time if we could actually stretch this out and do it over two episodes because I think our community, both individuals going to a local group but also group admins are going to get a lot of value out of thinking through the structure. And Kristen, I'm curious, you know, let's say I have a feeling next year you will be doing FI101 again. And I think you'll probably be excited for that opportunity to kind of start over. And I would imagine it's going to start to become a cadence where individuals realize, hey, this is the perfect time to bring someone to be introduced to this concept. I'm curious now you've done a PHI101 and we'll talk about 5201 just in a little bit here. As you think through it through the lens of this conversation and maybe coming into it, how, how many sessions, how many, you know, introducing from someone to zero to the point where we're all. They've been able to do some actions. We're all talking the same language. We've had enough time for them to get something, go home, digest it, take an action step, come back. How many events do you think you would like in a perfect world each year to really be able to have a cadence for successfully onboarding them? And I ask you this, knowing that you also started by kind of starting with like the Dave Ramsey baby steps. So maybe that means that you're familiar with the Financial Peace University to some degree or some of that stuff. How many sessions do you think you would need with a someone that is new to this, all of this?

[C]

Well, we're still kind of figuring it out as we go because we're crowdsourcing and people tell us after we do these sessions. And I'd also like to talk about this. So our idea right now is a FI101 probably every January. And then I like the idea, of course, of keeping the case studies. I think that's really important. So I'm thinking maybe we do a quarterly educational session, so a PHI101. And then maybe second quarter we do a 5201. And then Alan and I have talked about doing a third quarter just kind of on taxes, because a lot of questions about taxes. Right. We also want to do an AMA and ask me anything. So that would be like a fourth session. So I feel like with that we might be able to cover all the bases. We'll see. We haven't done it all yet. We're still kind of getting there. We've done the 101. We've done the 201. I think next we'll start thinking about the tax situation.

[A]

Alan, what do you think would be helpful to you? Let's say that you did this 5101 and, you know, you're going to be doing a 521. We're going to talk about that shortly. But they've come through 5101. What would you like to see them kind of think of in terms of things that they should do and be able to come back with maybe questions or, you know, different activities. They're going to be able to bring some of this information in before they come back for a 52 01. What are the takeaways or the activities or the exercises that someone should do after finishing a Phi 101?

[D]

Really? I think two of the bullets we listed at the end were track your net worth, figure out your net worth. We didn't talk about how to do that. So that's maybe where I came back to a Personal Finance 101 type of seminar. Again, everything we do in any of these things, you can find it out there. I mean, this is not new knowledge to anybody, although some people just prefer it live. So I would rather sit in a library space and have somebody tell me some of these concepts rather than go seek them out myself in some cases. But I think between tracking your net worth or figuring out what your net worth is and track your spending, those are the two. I mean, I don't know that there's anything revolutionary about anything else we said, but if you don't know either of those numbers, you're really not going to be successful in your next endeavor. When it comes to five, you have to know your gap, your distance between your income and your expenses and you have to know where your assets and where your liabilities are in terms of am I positive, am I negative? Does it matter? I think if you have those two numbers and two concepts, then you're ready for the next steps.

[A]

Well, this is just evolving as we're all thinking about this out loud and as various community members experiment with their own version. There's no prescriptive way to do this. It's just we're going to iterate over time. But what strikes me is that the case studies are the natural beneficiaries and recipients from individuals that took action. So if you do a 5101 and you have individuals that do follow up exercises like for instance, hey, we're going to be meeting back in a month, does anybody want to go for it and do a run through and do an expense audit and then they can volunteer it that information to be a case study. And then you could go through a live exercise where you do the value matrix in front of people with that individual to give you the additional feedback as you go. Individuals to basically say various ways that they've optimized in their various locations, that could be a very tactical and practical case study that would benefit and lock in and give individuals the opportunities to get targeted questions and feedback. Because if we're doing an expense audit, we're all dealing with variations of the same expense. Then applying that value matrix and see how it comes in, you have this blend of objective and subjective which trickle directly into value, which trickle directly into the choices. And those choices ultimately are going to decide your, you know, kind of the journey that you're going to find yourself on. I think it's this overlap of didactic. Right. So we're doing this presentation and then you blend and maybe you do one or two case studies, especially if the group's enjoying those in a format that works for the whole group. And then that is capturing a lot of those follow up questions that maybe didn't get hit the first time. And then now we're going back and we're saying, okay, you know, let's go ahead and look at what could be for, if we want to call it 201, et cetera. But by the time someone's finished a 5, 101 and 1 or 2 case studies and they've had that encouragement now from watching how maybe they didn't take action but the other individual did, the other individual did the whole thing. And then look at the confidence that they have with their choices and their actions. They know what they're doing next. Wow, that locks it in for everyone else. And now you're coming back and you're like, all right, what's the next stage? So what's going to happen is through this lens over the cadence of a year, everyone in all life cycles are going to be served right. You're going to have this natural progression from discovery to awareness. By the times you've done those two additional case studies, these individuals that took action are seriously working on control. And those are the ones that are craving. What I would say is now we're at 201 which is, you know, this is the optimization and trending into independence maybe. And so you're able to kind of blend and, and every year you're kind of watching the progression. The individuals that started out in awareness are coming back one or two years later and they're looking, you know, strongly at, you know, some of this lifestyle design stuff which all just felt very wishy washy platitude. You know, I just, that was just like, I can't even think about that. So it's just irrelevant to me and I can't get any value. Well, now you can. The goal is to get you to the place where you're allowed to dream about platitudes and what it would look like for your life. That's the goal. You know, you can think about what this looks like for you. Christian and Alan have had a great time and what I would like to do here, if you guys don't mind, would you be willing to stick around with me and Brad and we're going to go ahead and record a second episode with you and we're going to look directly at what you guys unpacked and discovered when you rolled out 201. We're going to maybe just iterate that. Hear what you did, hear what the feedback was, and then what is that? You know, what's that? Weaving. How do you weave that transition from discovery to awareness? Maybe these individuals are now feeling like they're starting to be in control. They have a plan. And now we're saying, all right, these are the things you didn't know. You didn't know. Would you be up for recording another episode with us?

[C]

Sure thing.

[D]

Of course.

[A]

All right, my friends, the fire is spreading. We'll see you next time. As we continue to go down the road less traveled,