← ChooseFI | Financial Independence Podcast
ChooseFI | Financial Independence Podcast
Financial Independence Basics with Jackie Cummings Koski | Ep 564
01:09:45
Jackie Cummings Koski returns to discuss the fundamental principles of financial independence (FI) and early retirement. The conversation emphasizes the importance of understanding FI—financial independence lets individuals no longer depend on a...
Loading summary
Transcript81 lines
- [00:00]
A
Hello and welcome to Choose a Five. Today on the show, we have my good friend Jackie Cummings, Koski, who's back for the first time in five years. And she is now the co host of the Catching up to Five podcast and the author of Fire for Dummies. And she's also a certified financial planner. I thought she'd be the perfect person to help me with an episode that I've been wanting to put together for a while, which is really a back to basics episode. This is. Okay. We could call it Fire for Dummies, but it's really, what do you do when you're getting started? What are the actions you can take? Why are we doing this? What does five mean? And this episode is not just for people who are getting started. I think really this is a refresher for all of us. We touch on a lot of really interesting things in this episode, especially the value of $100 per month. And I think you're going to be really surprised by this. I think it's. It's absolutely fascinating. And this episode really exceeded my expectations. I think this is an important one. I think you're going to get a lot out of it. And with that, welcome to Choose Jackie. Welcome back to Choose a Fight. It has been far too long, my friend.
- [01:12]
B
It has, Brett. But this is exciting. You guys were literally at the peak of my FI journey and helped me make sense of it all. To. I owe you guys a big thank you.
- [01:23]
A
Well, I appreciate you being there. And literally from the very beginning, you found choose of. I think five episodes into the show in 2017.
- [01:31]
B
I sure did. I remember when I started listening, I'm like, how did I miss this one? I'm like, how many more can I go back and listen to? And there was only five. And I think this was what, 2017?
- [01:39]
A
Yeah. Yeah.
- [01:40]
B
And I ended up retiring about three years later, December 2019. So I started moving fast after I started listening to Choose Fi.
- [01:49]
A
That is amazing. And, yeah, we went back and looked in the Facebook group, and you were one of our very first members in the Facebook group that first month, which is. Yeah, now there's something like 115,000 people in there. So thanks for being along for the ride. And it's just so cool to see. To see where you've come from and where you are now. And I know we did an episode right, I think, as you were retiring at the end. I'm not sure if we recorded it just before, just after, but it. I know it published in January of 2020, right after you officially retired. And for anybody who's interested, that was episode 161. And it was a really marvelous episode. It was Money Letters to My Daughter with Jackie Cummings.
- [02:28]
B
Yeah, that was my first book and that was when I was just learning about money. And of course, you know, as parents, when we learn something new, the first thing we want to do is share it with our kids. So that had been out, it was a self published book, but it will always be my greatest work. And, and I just Remember I retired December 2019. We recorded it sometime in 2019 and it aired after I retired. January 2020. Before COVID was going on.
- [02:53]
A
Yeah, the before times.
- [02:54]
B
Yeah, it's like BC before COVID Seriously.
- [02:58]
A
Well, what's so cool now is today you're a CFP and you're the co host of one of the biggest FI podcasts, Catching up to fi. So it's really cool to see your journey over these eight and a half years.
- [03:12]
B
It is crazy looking back because when I retired I really wanted to decompress and take that time off. I think I went back to school and that was like one of the main things I was doing. It wasn't my intent to get my cfp. It wasn't my intent to co host a podcast. It wasn't my intent to write the book Fire for Dummies. So when I look back, I'm like, what?
- [03:36]
A
It's amazing, right? And of course, Fire for Dummies, that was the next thing that was going to come out of, out of my mouth. Because that's essentially what we're going to talk about today, right? This is going to be kind of a back to basics episode, which I think is really important. And hopefully if you're listening to this and you've been in the fight community for a while, you're not going to tune this out. Because I think really we should all hit the basics every so often, right? And Jackie, we were talking about this before we hit record. Like, I want to do an episode like this every year because I think it's really important not only for new people, very obviously, but for everybody. Because sometimes we forget, we get complacent, we fall back into some old ways. And I think it's really important that we really touch on this.
- [04:20]
B
Yeah, it's so important, not only for new people, of course, those are the people we do want to touch because there's people discovering Phi and Fire every single day. But, you know, we still got a long life to live, you know, just because we reach FI or we're more in the advanced stages. It doesn't mean that these basics are still important. You know, this is what got us there. So you got to continue doing them. And there's modern things now. Things kind of change. You know, thinking about AI, talk about efficiencies. You know, when we were talking in 2019, AI wasn't even a word. We didn't talk about that. So there's just so many things that just change where. Looking back at the basics now, there might be a slightly different approach or whatever, but the basics are like everything, and we should all be revisiting. I think the once a year makes total sense.
- [05:14]
A
Yeah. Nice. Well, I appreciate you being here for the. The inaugural version of this, and maybe we can check in every year. So let's start. So you. You literally, when we said Fire for Dummies, this is not. Not exaggeration or hyperbole. I'm holding the For Dummies brand. Right? The. The Wiley brand. Fire for Dummies, written by you. So you quite literally are the author on this. And I'd love. So someone comes up to you and says, hey, Jackie, what is fi? What is fire? Why would I want to do this? How do I get started? Like, what do you tell them? Like, let's start with the elevator pitch. And then I think we should really dive into the specifics.
- [05:51]
B
Yeah. The first thing I always start with so that I. I'm not assuming I will tell them what it stands for, because people will say fire. I want to reach Fire or fi. And so I'll just tell them. The five part stands for financial independence, and the RE is retiring early. So I always do that. And then for financial independence, it just means that you no longer have to depend on a paycheck to live your life. You've created enough of a nest egg to. Or you could live off that nest egg. Whether you decide to retire early is up to you, but you've created the ability to do so. Who wants to work forever? Usually people. The last part, who wants to work forever? That almost resonates with everybody.
- [06:34]
A
Yeah, I mean, that is. That's pretty darn compelling. Right? Like, to me, to me, FI is about options. I think so many of us go through life ceding power to other people and just. Just assuming that's the way of life, that that's just the natural order of things. And I. I just reject that. And I've seen that in my own life and in countless, I mean, literally millions of people's lives who have listened to choose a VI over the years. Like, you can change the entire power dynamic. And that doesn't mean it's so critical that. That doesn't mean the power is such a loaded word, Jackie. Right.
- [07:10]
B
Like. Right.
- [07:11]
A
I don't mean you're lording power over someone. Like, we don't want to turn the tables and make ourselves tyrants. That's not what I mean at all. But. But just when you have some autonomy and power and control over your financial life, it bleeds in the best way possible into so many other aspects of life and gives you choices. It gives you freedom that you previously didn't have. And I think just the simplest way that I look at this is most people who live paycheck to paycheck are constantly on a knife's edge in that. Right. Like, if their paychecks stop flowing, their life would crumble within 90 days.
- [07:49]
B
I think most people are teetering on the edge. And a lot of the language that we have just used is just in the last few minutes. People have never really heard before or really digested it. The fact that, wow, I don't have to depend on a job. How on earth would I ever create enough money to be able to not depend on the paycheck? This is all I saw my whole life. So how's that possible? So there's a lot of questions just from suggesting something a little different. And when you say the word power, I guess it could be loaded, but the way I take that word. And you do gain a lot of power when you're not depending on someone else for that paycheck. It's like. And this is how I always thought when I was approaching retirement, my why? And. And it was always to use that power for good and to think about all the people I could touch. I never thought I was that special, but people that grew up like I did. You know, I grew up in poverty. I wasn't exposed to a lot of this. It's like, now I become the messenger and using my power to do something like, you know, write this book, do the podcast, all kinds of other things to spread that message. I just never imagined that I would be able to do that. I thought I would always have to have my day job to pay my bills and having the ability to do this and not have to depend on the job to pay my bills. I created my own paycheck. It is really powerful. I just would have never imagined. But I do feel like I'm making a difference.
- [09:21]
A
Yeah, well, I can say very specifically, you are making a difference. So there's no feel involved here, Jackie. That's what's so cool. And yeah, I mean, I think as, as you said there, it really, though it sounds elementary to us because we've, we've been living and breathing this for a decade. It's not. Most people don't even, can't even comprehend that this is an option. So it's, it's opening the aperture to something that was previously not. Not even like thought about and thrown out, but just never even thought about. Because like you said, who lives like this? Who even could possibly. Most people, of course, don't grow up with any financial education at all. Zero. They see bad habits around them. There's a lot of financial stress. That's just the way that life is. And you just assume that is what life is. How could you know anything else? And then you find a community like ours of people who have just changed the script a little bit and said, okay, well, if I can save money, it's not depriving myself. It's the exact opposite. And I think this is what's so liberating to, to me is that saving money is not about deprivation, it's about liberation. And that liberation starts from liberating you from stress from the very beginning. Because realistically we know FI is a, is a what, 15 to 20 year path, maybe 10 to 20 years if you're lucky. And that's a long time. But to anyone out there listening, like, your benefit from this starts accumulating essentially on day one, that first day where you make a change that makes your life better. That first time that you save a little bit of money that you were otherwise spending or maybe even squandering, your life gets better. Because think about the stress reduction, Jackie. This is, this is always my favorite example is like, man, for somebody who's living paycheck to paycheck, every single thing in life is an emergency. Everything. And it doesn't have to be. So what if. What's the first time you have $500 in the bank? $1,000, $5,000. Like a previously unimaginable sums of money, $5,000, $10,000. Right. Like your life is dramatically less stressful. Are you close to five with $10,000 in the bank? No, of course you're not. But is your life immeasurably better? I think yes, it obviously is. Yeah.
- [11:39]
B
Those small things really do make a difference. I guess the psychology of it does. So you'll have the person that. And this was probably me at some point where you don't feel like you even make enough money to save anything. And at that point, just take a small amount, maybe $10 a month or whatever, that's not going to, you know, make a difference that you could probably do and just create the habit. So you're in habit forming mode. So what you said about, you know, hey, you know, the tire goes flat, how cool is it that you had $200 where you could get a tire? I mean, so something that small, so just like starting small, creating the habits, that's definitely like the basics. Because I hate it when people. And it's easy to do, but I had in my head, you know, I'm stuck here, you know, I don't make a big paycheck, I don't bring in enough income, I don't have a spouse, you know, so there's a lot of reasons to say I just can't make any movement. And once psychologically your mind says, okay, I can actually do a little something, I can actually start educating myself. You know, you've got all these free classrooms via podcasts, YouTube or whatever, and that is making a difference. You're going to learn more than you knew yesterday. And if you are struggling or if you are in a place where you're barely able to make ends meet, is that a permanent state? Some people think that it is. Right. But we know even the smallest movements, even if it's just education, could make a difference. So I see a lot of people stuck at that level and they don't have to be.
- [13:25]
A
Yeah. And it's lack of belief, I think, and it's lack of seeing any example in their real life of somebody who has done something different. And I think that that, to me, I know you said this when we were chatting, was just seeing other people's stories. Yeah. It emboldens you. Right? Like, it makes you realize, like, oh, wow, this person is like me in some way, whatever way, fill in the blank on that. But if they could do it, why can't I do it?
- [13:53]
B
Right.
- [13:54]
A
Right. I just find that wonderful.
- [13:56]
B
Yeah. Hearing other people's stories made a huge difference. And early on in the fire movement, you know, I was a single mom at that point, and there was no single moms talking about it. Black single moms even. But, you know, the mad scientist, somehow what he was saying was really resonating with me. So listening. And honestly, if I listen to a whole hour podcast, even if three minutes of it, I took away something, it was valuable. So I listened to every single episode, every single guest, and the whole thing might not have resonated with me. But I listened with all this curiosity and I had some, so many takeaways that did make the difference for me. Because, you know, when somebody was talking about like 25 times your expenses and throwing all these things out, some things I didn't even understand, I spent a little time with my own numbers and started seeing, well, I can't do this. I don't make the big income, so I need to adjust this. So I just did a lot of adjusting and tweaking and that's what people will have to do. It's not this, you know, a lot of times when, you know, fires in the media, they think that it's this strict doctrine that we follow or something. It's not that at all. As you get smarter, as you start learning and the lights start turning on, you start to customize it for your situation. You got superpowers, you got adversities and it's like, how are you going to turn those into making it realistic for you?
- [15:21]
A
Yeah, I think that's, that is perfectly put. And there is no doctrine. That's something that's really important. And I have to say I don't usually like pat myself on the back all that often, but like that's something we tried really hard to change early on here at choose a 5. Because I think prior in the pre choose a 5 days of the 5 movement, 2013-2017, it really was a lot of that caricature of this is only for white males in their 30s who are making a hundred to $300,000 as computer software people or engineers or whatever. And it's like just because. And it's so silly, but it's a caricature. Right? Like, but because there were a couple famous early bloggers that fit that. It was like, oh well, that's everyone. And it's like, no, like this is not limited to any type of person or any job or something ridiculous like that. It's. This is for people who are looking to make their lives better. Hard stop. End of story. Like, all right, are you listening to this? And you want to make your life better, you found the right place. Okay? Choose a five is a wonderful place. Catching up to five. Wonderful place. It really is. And Jackie, like you said, you're in habit forming mode at the beginning. Okay? So right, like you said, save $10. Let's be clear, $10 is not going to get you anywhere. But as that first step, it's going to get you a long way because you start seeing how easy these little Changes can be right. And Jackie, that to me, I'd love to hear your thoughts. Maybe put yourself back in the shoes of, of Jackie circa 2017 or whenever you, you know, when you found Choose a Valley. Like what were the first couple? And I know it's hard to remember because it was a long time ago, but like those first couple changes you made, do you recollect like any big wins or small wins, frankly, from back then?
- [16:59]
B
Yeah, I remember for me, so this was post divorce. So I got divorced. It might have been three or four years prior to me trying to get my finances together, but that really woke me up. I remember I was talking to a friend, I worked in Ohio, she was in Boston, and, and we were talking about stocks and I was trying to, you know, pick stocks and things like that. Didn't know what I was doing. But she told me about this nonprofit organization that's called Better Investing, which I talk about a lot. It was nonprofit, but they supported investment clubs. And so going back to you mentioning the habit forming phase, so I started going to these investment club meetings. These were smart people, way smarter than me, but I went every month. And the way that the club worked, once I joined it, it wasn't about trying to get rich in the club, it was about learning. And the most you could contribute, they had real portfolio invested. Real money was $100 a month. And so that wasn't a ton, but it was a little skin in the game. And I could do anything I wanted to do in my own portfolio. But that $100 a month was consistent, it was automatic. And when I was learning things like compound growth, you have to invest, you cannot save your way to wealth. And there's all these accounts that are tax advantaged. So then from that habit and learning what I learned there, I'm like, why am I not doing that in my 401k? Why am I not doing that in my Roth? Why am I not doing that in my hsa, which I learned that you can invest in? So from that little. A hundred dollar habit, a hundred dollars a month, I applied it in so many different ways and took what I had learned and multiplied it.
- [18:46]
A
Yeah, that's really, really cool. I think these habits, it's not even that we're trying to undo bad habits for most people. And that might be an exaggeration because a lot of us, myself included, had bad habits. But I think it's just a lack of knowledge and it's fear also, especially when it comes to investing. And we'll talk about this a Little bit later. But when it comes to investing, I think a lot of us think, how could I possibly do this? Isn't this so complex? Don't I have to hire some person who has been doing this their whole life? And this is maybe the most insidious one, isn't investing in the stock market, gambling.
- [19:19]
B
Right. Yeah. The whole investing part I think does get a lot of people tripped up. And you know, as popular as J.L. collins book is Simple Path to Wealth, there's plenty of people that have not read it or even have any idea that it can be just that simple.
- [19:39]
A
Agreed. Okay. So I said we'd talk about it later, but let's just do that now. So in broad terms, how do you think about the simple path to wealth and investing? I guess.
- [19:47]
B
Well, simple path to wealth, genius. My first exposure to investing. Again, exposure is a big important word because if you can't see it, how can you know what to replicate? How can you know even what to do? So I wasn't expo. I didn't know anybody that invested. I didn't know anyone that knew anything about the stock market. So joining this investment club was the first sort of organized way that I did it. So that was my introduction. Now, probably not the first place to start, but all this stuff comes full circle. So I started backtracking. You know, what are my expenses, you know, what do taxes look like? So I do believe in keeping it very, very simple. Now with the investment club, we're basically investing in individual stocks, which I know for a lot of fire people is blasphemy, but Brett. So stick with me. So I enjoyed doing that. I enjoyed being a nerd and digging into great companies. You know, I own Berkshire Hathaway, that was one of my early stocks. I own a bunch of individual stocks now. I don't necessarily recommend that other people do that and you don't have to do that. I'm the nerd that likes to dig in. I take pride in ownership. I've gone to annual meetings and I look for the earnings call. I enjoy that. Okay. Most people do not. Now on the opposite side of that, I believe in straight up index funds like Simple Path to Wealth. So it's not all or none. And you have to do things that light you up. I would say 70 to 80%. I'm straight up index. Fine. But Jackie's little fun is I enjoy investing in individual. And this is long term investing. This is not options, this is not trading or anything like that. And honestly I, I make many less investments in new Companies or stocks than I used to. I'm not as interested anymore, but I keep up with what I have now. I like the idea of index funds and we know that the FIRE community talks a lot about and the book talks about vtsax specifically. Now I think the benefit to that was that a lot of people just learning, going back to the basics. They're like a low cost index fund. So what does that look like? How do I find it in my 401k? The fact that he named a specific ticker, people can easily go and look it up. Okay, so the majority of my portfolio is a straight up index fund. It's not vtsax. I lean growth. So I have like a growth index fund. But I've done my research on that and I like to set it and forget it. So I am simple path to wealth approach with a little bit aside of an individual stock portfolio. I think I will always have an individual stock portfolio. But again, that is not for everyone. Just like real estate for instance. Real estate's not my thing, I'm just not interested in it. But there are some people that really get down with that and they do an amazing job and they light up when you talk about real estate. So find the thing that lights you up the most. But it can be just as simple as a stock index fund or even a target date fund. But you don't have to do all these fancy asset classes. It's cheap to do it now, it's easy. Information is available everywhere. So that part, you know, I have my cfp, so certainly I've learned about all kinds of investing and strategies and things like that. But I personally don't think that all of that is necessary. And I keep it very simple with the exception of, you know, my individual stock portfolio.
- [23:28]
A
Yeah, and I love that you went into that because I think it's important for us to to be honest about what we actually invest in. Right. And so similar to you, I'm a Warren Buffett acolyte. So I have a significant amount of Berkshire Hathaway. But that's essentially the only individual stock that I own of any actual real value. I think I own a little bit of a mini Berkshire called Markel that's actually located here in Richmond, which is a wonderful, wonderful company. But very importantly, none of this is financial advice. So let's be entirely clear, Jackie and I are just talking about what we do. But yeah, I mean I think what's so great about investing and it's one of the most paradoxical things that I'VE ever experienced in my life is that you almost get better results statistically when you do the least.
- [24:11]
B
Yeah.
- [24:12]
A
And Right. Isn't it fascinating?
- [24:14]
B
Yes. Yes. That is exactly what I tell people. Because, Brad, I feel their trepidation, I feel their anxiety just talking about investing in the stock market. And I usually will end with this conclusion for them or as the takeaway, I'll say investing is one of the few parts of your life where doing less is more.
- [24:38]
A
Yep. And way more in a lot of cases. That's the interesting thing. So the way that I look at it is. So, yeah, there's a lot here. So let's just slow down for a couple minutes. So when you're investing again, a lot of people think of investing in stocks or mutual funds as something akin to gambling. And I think that is just a lack of knowledge. Right. So when you are buying a stock or a mutual fund or an index fund, whatever it may be, and then you're buying a piece of many companies, you are an owner of that company. Yes. You're an infinitesimal percentage owner, but nevertheless, play it out. If you bought every share of Berkshire Hathaway, you would be a 100% owner of Berkshire Hathaway. It's incontrovertible. That's just the fact. So it's the same truth. Whether you own one share or every share, you are an owner of that company, and that's what you're doing. So when you buy an index fund or an etf, which is actually what I usually talk about here on the podcast now, I don't talk about mutual funds as much as. As ETFs. I think there's a little less risk, but not in the. Not in the traditional sense. Jackie, I think a lot of people hear that VTS X and they think that they have to have that for some reason. And what they'll do is they'll. They'll have an account at another brokerage, let's say, like a Fidelity or Schwab. And I've heard people who have accounts of Fidelity and they're like, oh, I heard that I should have VTS X and that's Vanguard's mutual fund. Now, you don't want to buy someone else's mutual fund at the other brokerage because they usually hit you with a significant fee. So I actually heard, had someone write into me and said, hey, for the last six months, I was putting $150 in every two weeks into VTS X. But after I read your newsletter, because I talked about this, I have it at Fidelity. I look back and I got charged something like a 70 or $75 fee every time. So she lost 50% of her investment just because she made that, that small mistake and she thought she was doing it right. So the easiest way. And again, not financial advice obviously, but if you had planned on buying something like VTS X, you can just buy the ETF version of it. So in this case it would be called the V T I. Okay. And you can buy that at any other brokerage and it's just an ETF. And then in most places there are $0 commissions. You won't pay that crazy fee. So you're getting the same exact fund in essence, but you're not potentially getting hit with this crazy fee. So that's why I think in 20, 25 and beyond, I think it's just bad advice to tell people VTS X because they get so myopically focused on it that they, they make this small error that can add up to something big. So that's why I like that. But really, when you buy that, you own a small piece of 3,000 companies, that's a total stock market fund. And really you have a hundred plus million American workers and worldwide workers working to make you rich.
- [27:33]
B
Right.
- [27:34]
A
That doesn't sound like gambling to me. That sounds like the smartest thing you can possibly do. And like you said, set it and forget it. And I think that's, that's the best way. And this is where I'm a cpa. I am fairly knowledgeable about both accounting and personal finance, obviously, but yet investing always seemed like a black box to me. It seemed like it was something that was just impenetrable. But when I read the Simple Path to Wealth and J.L. collins Stock Series before that, it gave me some certainty that all I really have to do is match the market. So that's why I want to just buy the market. And like we were saying before, there's no secret to investing. Like there's no person who's come up with some magical way to beat the market and you just have to pay them extra, like over our investing lifetimes, which hopefully is 30 to 70 years for many of us. Like if you can match the market at the lowest expenses possible, you are going to outperform probably 90 over a 50 plus year period. You're going to outperform 99% of people. That's just the way that it works.
- [28:38]
B
Right? And there is no secret SIM in investing, just like you said. And this, you know, VTI that you Mentioned, that's the exchange traded funds which typically is much easier to get. And even if you're with another broker or it could be under another brand, the VTI and vts, those are Vanguard. Okay. Vanguard is just known as the low cost leader. That's why that's always the one mentioned. But all these other low cost brokerage, they have a version of that too. Schwab Fidelity. And generically the name for this, it would be a total US stock market fund. Like Brad said, you get a little bit over 3,000 companies. Another common one, Brad, is just an S&P 500. When I'm talking to people that's not familiar with it, I typically will start with the S&P 500 because it's easier to explain. I'll say it's the 500 largest US companies. Like what kind of shoes are you wearing? Nike. They're in the S&P 500. Where did you have lunch at last week? Chipotle. They're in the S&P 500. What brand is your phone? And you know I go into high schools and stuff like that. So I've learned to break it down pretty good. But it just relates, I always want to leave them with a seed to say you know more than you think you know, you know what The S&P 500 is. Once I start pointing out the things that you buy, that's part of the S&P 500. And then I do have, you know, some little tricks. So for the S&P 500, the Vanguard fund is Voo. So I'll say 5o V o o. Just all these little simple tricks. And again, if I'm talking to younger people, how do I make this simplistic enough for them to remember? But another important part is the fact that most people start investing at work through their employer sponsored plan. So a lot of times that's where I'm meeting them and that's why I, I have to get away from the tickers because they don't have access to everything in their 401k. So I'm teaching them things like and if you have a 401k and you want to go back and say what am I invested in and what do I want to be invested in? I will show them something as simple as click this extra link and it'll show you all, all kinds of things about this fund. It'll show you the benchmark. Is it The S&P 500? Is it the total US stock market fund? It'll show you the top holdings It'll show you the risk tolerance, it'll show you a lot of things. Most people never do that in their 401k. They're just looking at the return year to date. And that's, you know, is not the greatest measure, but little things like that. But that is where most people start investing is through their employer sponsored plan.
- [31:17]
A
Yeah. And I think that is a great place to start with this because so many people you, okay, you made the right decision or you made a positive decision to put money into your 401k, let's say. And now not everybody has a 401k, of course, but if you're a public employee, you might have a 403B or 457, etc. So you might have different options. Right. TSP would be military, et cetera. So you probably have something akin to a 401k. And there are going to be many options. Most likely you're going to get literally a sheet of paper or in this day and age, maybe it's just a one page website and there are going to be 30 different funds. Where the heck do you start? So for me, my kind of back of the envelope place to start is there's usually a column that has some percentages. It might, hopefully it'll say expense ratio. And the best way that I've found to very quickly say, okay, what's the closest thing to AN S&P 500 or a total stock market fund is find the lowest expense ratio. Now in the wild, if you got VTI, let's say, I think the expense ratio is only 0.03%. So it's 3. 100 of 1%. Now sometimes when you 401k is going to be a little more. But if you find something that has like 0.1% or 0.15, something like that, there's a reasonable chance. I can't guarantee you, but there's a reasonable chance. That's something that's akin to, to this type of fund. Now of course you have to do your due diligence. You can ask a question like Jackie said, you can click into it and say like, hey, maybe they'll just say like this approximates the S&P 500. Okay, great, you've got a wonderful starting spot. And for me, and again, this is just what I do in my own life. I have essentially other than Berkshire Hathaway and some other just random investments that I have, all of my investable assets are, are in something like vti. So that's just where depending on the brokerage, et cetera. But like, there's no secret, like Jackie said before, like, there's no. Hey, because we're in the podcasters club, we have. I'm being preposterously ridiculous here, like that we have some access to something like. No, of course not. There are.
- [33:21]
B
No.
- [33:22]
A
That's the beautiful thing, like the secret to life is actually simplicity. It's not complexity. And it couldn't be simpler for me. It's just I put essentially every dollar I have into AN S&P 500 or total stock market Fund. That's it. That's the whole list.
- [33:37]
B
There you go. And there's probably not a lot of money to be made off of those. So that's not talked about a lot.
- [33:43]
A
Well, for. Not on my side. Right, so.
- [33:46]
B
Right. Not on your side. For the profession. Yes, for the profession. There's not a lot of money made off of straight up index funds, the actively managed funds. There's a lot to be made. Now they're trying. Yeah, the executive order has been signed. They can put private equity inside of a 401k, adding complexity. And you know, I've got a lot of thoughts about that, but I think the average person, you know, barely understands how to choose an index fund inside their 401k. And like you said, starting with looking at the list of what you have in your 401k. And again, this is, Brad, one of those things that may cost you nothing. You go into your employer sponsored plan. I happen to, you know, I'm not a government worker. I wasn't a government worker, but I love the Thrift Savings Plan because all the information about the Thrift Savings Plan is publicly available. And so the S&P 500. I know that's in the Thrift Savings Plan. That is the S&P 500. And when you look at the list, like you said, you look at the expense ratio. And it was funny because before I left my company when I would look at my 401k, there was a list of, you know, all these different funds and they had like eight different columns where you can sort it. The only column you couldn't sort on was expense ratio.
- [35:04]
A
Huh.
- [35:05]
B
And I'm like, what is this about?
- [35:07]
A
You know, that's the most important one.
- [35:08]
B
I think that that's one of the most important ones. It's not the only factor, but that's an easy way to do it. And Brad, you know, I'm sure that you did not read this last tax law that passed, but one thing that stuck out to me that I don't hear a lot of people talking about is that for those child savings accounts, they were very specific about what could be in there. They said it needs to be a US index fund like the S&P 500. They specifically mentioned the S&P 500 with an expense ratio of 0.1% or less. So gauntlet, you always use this word, gauntlet thrown down. So for these employer sponsored plans, if you can't find at least one fund that is 0.1% or less, then something is wrong. This is a huge piece of legislation that just specifically put in this number. To me, that's the new benchmark.
- [36:00]
A
Yeah, that's wonderful. That's really wonderful. And yeah, again, like Jackie said earlier, there's no, there's no doctrine and there never will be doctrine. From my vantage point in the FI community, I think to me this is just the easiest way to invest and the highest likelihood of success. But there are people who love investing in individual stocks. There are people who love, I don't know, paying stocks and real estate like you do your thing. I think this is the highest likelihood of maximizing my net worth over 50 years. And I sleep very, very soundly doing it. So works for me. And just one last word on the 401k or things like that. Jackie is a lot of people don't know that they have a 401k match. And I think this is something I'd love for you to talk about that just really quickly, like, what is it? What should people be looking for?
- [36:45]
B
Yeah, that's a big deal. It can really be the wind at your back. Most employers now with their retirement plan, they will provide a match, meaning if you put in a certain amount, they will match it. So the most common match is if you put in 6% of your pay, they will match you 6%. So immediately you're doubling your money. So even in the early days when you're starting with the basics and you don't have that much to save, always get the match. I don't know of anyone that will argue with making that the top priority when you start your investing life. And for me and all these little nuggets, you know, we all have little advantages or little superpowers. My company that I worked for, they had an exceptional match. If you put in 7%, they put in 9%. Very unusual. But I only learned that by, you know, finally taking the time to read how much they match and how it work. Yeah, if you were there for at least seven years, which I was if you put in 7%, they put in 9%. Now I did get it all the way up to the IRS maximum, but that means almost 10% my company was putting in for me. So that helped me a lot. So everyone will have some little thing like that that will be these little extra bonuses or these extra little pushes somewhere in their life that will help them on their journey.
- [38:08]
A
Yeah. And that sounds like an extraordinary 401k plan that you had. I think a lot of people, I, I don't remember exactly what mine was at my company, but I've seen a lot of like 3% matches. So I think that's probably somewhere 3 to 5% is more standard. Not every company offers this, of course, but if yours does and you're not contributing to your 401k, you are basically turning down part of your salary. Whether you realize it or not, that is part of your compensation because it is literally free money. So if you put in, let's say in a case where, where it's not quite as generous as Jackie's amazing one, like you put in 3% and they'll match up to 3%. So that means, let's just say for round numbers you made a hundred thousand dollars and you put in 3,000. Your company will take $3,000 out of their bank account over the year and put it into your 401k. So if you didn't put that 3,000 of your money in, you would get nothing from them. And that is literally 3% in that case, 3% of your salary that you've just basically said to your company. Yeah, no thanks. I don't really, I don't want that money anymore.
- [39:10]
B
Yeah. And Brad, I remember when I was at my company, they sent something around about bragging that 89% of people are taking advantage of the company match. And I'm thinking that means 11% is not taking advantage of the match.
- [39:27]
A
Yeah, I mean that's sad. And I guess they just didn't realize or they weren't in a position. But yeah, for me that is just low hanging fruit because it's a guaranteed. In this case the examples we're using 100% return. It's just free money. So that's a nice easy way to kind of juice yourself. Thanks for listening to Choose a Phy and for all your support of our mission here. The absolute best way to support Choose a Phy is when you sign up for your next rewards credit card to use our cards page at choose a buy.com cards. I keep this page constantly Updated. So it should always be the top resource for you. Thanks for being part of our community and for your support. But let's go back to maybe back to that basics. And I think a lot of us, you talked about habit forming that first $10. I think a lot of us have to flex our savings muscles, really. And I think most people are living paycheck to paycheck or paycheck to paycheck ish, let's say. Right? Like really darn close. So they have to make changes. It's hey, we found the FI community. We found choose a vi. We know we have to do something and where do we get started? I think it's kind of chic in this day and age to say like, oh, you can just raise your income. And I do. Listen, I get it. I get that that is like in the grand scheme of things, you can only, as Jonathan used to say, frugalize so much. Okay, so you can only cut so much. Theoretically, you could earn an almost unlimited upside. But I think, Jackie, you and I both know it's not so easy to get a new income overnight. Like get a new job in the next two weeks. I think realistically, if we're all honest with ourselves, the easiest way to get started with FI is to look at what are you spending and to start making some changes.
- [41:13]
B
Absolutely. That is the quick, low hanging fruit for someone just starting out. And you're right, you know, increasing your income, that's not done over. Like for me personally, I don't think I did a great job with increasing my income. And my main reason was I was a single mom at the time, so I wasn't looking to work more. I wasn't looking to get a promotion where I had to travel and things like that. So there are many reasons why it's much easier to start to look at your expenses. Now, I know you and I both agree that we're not saying make yourself miserable. Don't do that because you're not going to stick with it. But look at some of the things that is not going to change the way you're living to get a lower rate. Things like, you know, Internet things like cell phone service. You talk about this all the time. I probably pay too much for my cell service. And we're not all perfect. Yeah, you can't optimize everything. I probably need to optimize my cell phone a little bit more. But another one, Brad, that I see all the time. Most people stick with the same insurance company their entire life for their car insurance. And their home insurance. You could probably. Every time I have switched, I've saved money by switching my insurance company. I haven't had to do that in a couple years, but I always check. So just little things like that. And I like creativity, so come up with creative things. Like, I love my gas app. Like where I live, I've got 10 gas stations within three minutes of my house, probably or less. And so consistently there's one or two that's the cheapest or there's like a brand new gas station. Not only are they cheaper with gas, but every gas station around them have lowered their price. And those are reoccurring things. I'm always thinking about the things that are happening again and again and again. So whatever's in your life, just by evaluating what you're spending money on, the things you don't care. Now, a lot of people will use the coffee or the latte analogy, in my opinion, if that caffeine and that Starbucks coffee or whatever gets you going, it makes you creative and wow, you're on fire when you have that coffee in the morning. You should not cut that out. That is valuable to you, is doing things for you that is helpful. Go look at other areas of your life that don't really matter where. When you look at it, you're like, why am I paying that much? I don't even care about this. You know, subscriptions, streaming services, sometimes that we don't even use anymore. I mean, I'm way overdue from canceling my Hulu account. I might have watched it twice in the last month, and it's only because I knew I was still paying for it.
- [43:46]
A
Yeah, no, I totally hear you. And that's. Yeah, clearly. And this is very important. FI is not about deprivation, okay? Certainly the modern fi. I think there was again, that other caricature of this is people living on rice and beans and spending $20,000 a year and just racing to some number, some net worth number on a screen. That's the old days. That doesn't work for the common person. It just doesn't. Because I'm the common person. I know that doesn't light me up. It couldn't. This is about living a better life. But let's be clear. It's about making decisions, okay? And you have to buy based on what you value. And like Jackie just said, you know, this, this coffee thing is. Has again become a meme. You don't have to cut your coffee out. You don't have to cut life's little luxuries out. At all. You don't have to do anything other than you have to take action. You have to, because right now, if you are living paycheck to paycheck, you could take in all this information. You can listen all 700 plus episodes of my podcast, couple hundred of Jackie's like, and nothing's going to happen. You're going to have all this information, but if you don't take action, literally nothing happens. So you have to make changes. And again, we both said the easiest way is to look at, hey, what am I spending every month, what am I spending every year? And really, really scrutinize it and say, where's all the money going? Because maybe I make a decent salary, maybe, maybe not. But let's just say I make a nice decent middle class salary, but I'm still not getting ahead. Where is all the money going? Okay, like, you have to figure that out. And also, let's be clear, like, small things can make a big difference. So, Jackie, I'm going to take one minute here and just explain just the general 5, 4% rule of thumb, because I think it's important and it ties into like the value of small changes. So basically, if you're listening to this and you've never heard of fi, okay, how do you figure out what amount of money you need in your FI number, as we call it, your investable net worth to eventually get to that point of financial independence where working is optional. And you basically just really simply, you take what is my life cost? So what are the actual expenses? Not how much I earn, because included in that is a larger tax amount than you'll pay when you're not making any money. And also savings, just by its very definition, or else you'll never get to financial independence. So you look at what's actually going out, what am I spending? Okay? And then you just take that number and you Simply multiply by 25. Okay? So basically, for every $40,000, it's a million dollars you need to reach five. So if your life costs $60,000, your FI number is 1.5 million. Okay? And it works. So this math works. Whether you are somebody who does spend that $20,000, well then you only need 500,000 to retire. Or if you spent, I don't know, $400,000 a year, you need 10 million. It just, the math is the same. But so it's what is my life cost times 25? Now we can kind of argue at the margins over is it exactly 25? That's not for today. As a North Star. That's the easiest way to look at fi. Now Jackie, I bring that up now because the way that I look at this is it's the value of small changes for every hundred dollars per month that you cut out of your budget. Every hundred dollars. And like you said, recurring this is not just like a one time change. Your fine number goes down by $30,000. 30,000. And now just the simple math on this is a hundred dollars a month times 12 is $1,200 a year. And now I said it's your annual expenses times 25. So you take $1200 times 25 and that's $30,000. Now I'm doing the opposite math here where we're reducing that 1200, so it's reducing your fine number by that 30,000. But Jackie, it doesn't end there. And that's the beautiful thing is now you have that hundred dollars and you're investing it, right? So that 30,000 in and of itself is fantastic. But the kind of unreported part of this is now I'm putting that $100 every month for me in VTI every single month. I'm expecting somewhere like an 8% return. And I think my 5 journey, if I'm just starting out, is going to take me about 20 years. Well, I threw this into a compound interest calculator and if I saved a hundred dollars a month, so just the savings, that's all we're talking about. At an 8% annual return, that's worth about, about $60,000 after 20 years. So it's not a $30,000 difference, it's a $90,000 difference. So you, you have $60,000 more and your fine number is $30,000 less. That's a $90,000 difference, Jackie. That's extraordinary for a hundred dollars per month change.
- [48:40]
B
It is. And I think most people do not frame it that way or haven't been exposed to anyone talking about it in this way. You don't have to pay for this type of knowledge, this type of guidance. You can get it, you know, on podcasts and YouTube, you know, choose a fi has been around for nearly a decade. And that to me was the most valuable knowledge that I got to help me fast forward this stuff. Putting things as simplistic as that was making sense to me. The 25 times your expenses, I had never heard that before. Yeah, but yeah, the way that you're talking about, you know, for saving that a hundred dollars and how it compounds, I mean, that's, that's pretty. And, and I think it shrinks it down to size as well. We're not talking $5 million. Not everybody wants to get to $5 million. Not everybody wants to have a million dollar cash flow business every year. What is your goal? I reached my enough like, you know, I've done a couple of videos that's mainstream where everybody's commenting and so many people will say, oh girl, you need to go back to work or that's not enough money. It's like you're using your measuring stick. That's not my measuring stick. I have a goal in mind of what I want to do. I can do it with, you know, my number happened to be between around 40 to 40 thousand dollars a year comfortably. And I think sometimes it's. That sounds like a really low amount. I live in Ohio, which I would say is a mid cost of living area because the property taxes are up there and some other things. But I thought a lot about this and part of why it takes me a modest amount like that to live comfortably is that a lot of people spend a lot of their income on debt, car loans, spending money on vacations that might be above their means. Certainly you should take a vacation and enjoy yourself. But you know, maybe a house that doesn't really match their income level. You know, take your pick of all a credit card debt, that's another really big one. So by the time you account for your debt repayments, it could push it up to a lot. So I didn't have any debt besides my very modest mortgage. My mortgage has been about $1,200 for, you know, the longest. So if you take debt out of the formula, you probably could live off a whole lot less. So when people say they live off $100,000, well if 40% of that is your debt repayment then you know, that makes a big difference. So I don't think we talk enough probably in the FI community about paying off debt. But that piece is very important and I will get the question, you know what? If you have a lot of debt, let's make a plan to pay it off. And again you do the same exercise as your expenses. You bring it all together, you see where your money's going. You do need to look at the interest rates and, and just make you will feel better. And this is a win to just make a plan, put everything in sight so that you can clearly see it. It might be difficult, it might be stressful for you and it might be something that you just dread doing because nobody wants to look at their debt. But You've made a powerful step if you've decided that you're going to do that. And that's why the mental part of this whole thing, the psychological part, is very important. If you believe that you can do it and you take maybe what was a difficult step to gain some of this knowledge and to make these small changes, you are going in the right direction, and all you need to do is be directionally correct, and you will start moving faster and faster as you shed the debt. You'll move faster as you lower your expenses reasonably and comfortably. Your load is lighter, and you can move faster.
- [52:32]
A
Yeah, I think you touched on so many important things there. So first, it's just getting all of this on paper, like you said. It just. Or the computer, whatever it is, wherever you want, just somewhere it lightens the load. Because really, so many of us, our biggest stress is money, and it doesn't have to be. And I think most of us, before we find FI just want to stick our head in the sand because it just. It seems easier. We just avoid, avoid, avoid. We're not going bankrupt. We can pay our bills, and we just kind of do that, and we're just not honest with ourselves. And I think that's one of the most important things when you get started with FI is just. You got to get everything down. You got to say, like, hey, what do I own? Right. What are my assets? No matter how little or much they are, what do I owe? What are my liabilities? Right. Like. Like Jackie said, what. What's all the debt that I have? What's the actual amount? What's the monthly payment, et cetera. And then you have to write down, what am I bringing in to my income and what. What's going out every month? My expenses. And that's like putting my accountant's hat on. Like, that's. That's just the most important thing you need to know. You have to.
- [53:36]
B
You got to know where you're starting. You got to know where you're starting, because you'll be able to easily identify, okay, here are my deficiencies, and here are my superpowers. Like, for instance, if you make $250,000 a year, your problem might not be income. You know, if you already cut your expenses to the bones, then your problem might not be your expenses.
- [53:58]
A
Yeah.
- [53:59]
B
So it will help you identify what are your gaps? What are your holes? What are the things that you need to focus on the most? And it's going to be different for everybody.
- [54:08]
A
Yeah, everyone's situation is different. That's Absolutely true. And yeah, when you said like paying off debt, I think that's, it's so important to look at that. And I would, I would add to that a little bit, which is just paying off debt is akin to lowering expenses because that's essentially like, you know, when you look at your life that costs 40 to $45,000 or thereabouts. Like I want to take like a 30,000 foot view of this, which is saying almost certainly you don't have any significant debt in there. You don't have credit card debt, you don't have car payments. Right.
- [54:36]
B
Like student loans.
- [54:37]
A
Yeah, I mean all of that stuff is either never existed or has been paid off. And like you said, you have a very reasonable mortgage. But for many people, eventually you're going to, maybe you're going to pay off your mortgage, especially if you plan on staying in your, in your case, your Ohio home for a while. And I think this goes back to what I was saying before, which is it's about what is my life cost. So when you jokingly said like, you know, girl, you need to go back to work, is what you're hearing in these lovely comments. It's because people don't understand that when you say my life costs $45,000 a year, all they are hearing is 45,000. And they're, they're thinking, oh, that's like her income. And what is that going to be worth 30 years from now? Okay, well forget the 30 years part and let's just look at, that's her income. And I, I reject that because it's not for most people, let's say most people, even on an amazing path to fi. Right. Like if they make a hundred thousand dollars a year, let's say they make, they pay, I don't know, 15 to $20,000 in taxes. We'll say all in. This is like the Social Security tax and maybe small amount of federal and state tax. And like you said, property taxes, local taxes, it's probably a lot, but it's probably well less than $20,000 in tax, honestly. But, but we'll just go with that. So that means after tax you're bringing home 80,000. And now to get to five in about 15 years, you have to save close to 50% of your income. Okay, so that person, and now again, this is a bit of an extreme example, but nevertheless that person who made 100,000, well, in order to get to five in 15 years, you're saving 40,000 of that 80 that's left and you're spending 40,000. So that person's expenses are 40,000. Now, Jackie, that probably looks a whole heck of a like, you know, looking in the mirror.
- [56:25]
B
That's why it, you know, one time someone asked me the question, is there certain characteristics of people that are attracted to the FI community? And I had to think about that for a minute. But I think one of the characteristics is curiosity. Are you asking questions to say, even if you're doubting it, because in the early days, you know, when you were having people like the mad scientists on your podcast saying that they save 56% of their income, I'm like, that's not possible. And I was the biggest skeptic ever. So what did I do? I was curious enough to go digging. I'm like, well, let me try this with my own and see if this even makes sense. And. And it took me down a whole path of learning about me and what my numbers look like to where I said, okay, I think he was right, you know, but I didn't take it on face value. I. That just prompted me to go do my own homework. But yes, the way you put it makes more sense. And if someone is truly curious because sometimes, you know, people just want to be right and they want to spew out, you know, something that makes them.
- [57:33]
A
Sound smart or look for an excuse of why they don't have to do it.
- [57:36]
B
Yeah, like, you know, any fire articles or videos that come out and when people will respond, well, this person is crazy because they can't even get their money out of their retirement account. They're not 59 and a half yet. Well, okay, so my thought about that all the time is, do you think that this person was smart enough to invest enough to be able to retire early, plan their whole future and not already had that question themselves and took care of it? And the reason why I do love the FI community so much is because they are some of the smartest people I know. They're going to do their homework, they're going to. They are doers. So we didn't even talk about the community aspect of the basics, but that's what community is going to do for you by being around like minded people. Even with my investment club, that was community. That was the first sign of community with the fire community, smartest people on earth. So you're going to get a lot of your support, a lot of your motivation from listening, watching, talking, spending time in these communities, whether it's online or in person. It's really cool to be in person now. There's just so many events. There's no shortage. Well, there could probably be more, but there's a lot more events than there were when we started talking in 2017.
- [58:59]
A
Oh, there sure are. And there are, yeah, obviously the bigger events, but even something that didn't exist in 2017, where the choose of A local groups, right? And now we have 250 to 300 of them. And in that many cities across the world. And yeah, just to have people in your community. We talked about stories, right? And seeing other people that are doing this. And you see, you hear about that on podcasts, you read about it in, you know, old school blogs and things like that. But to see people in your own community doing this is really powerful. So if you're listening, you're not part of this. It's obviously just like everything in Choose a Vi, it's completely free, of course. Just go to our website, choose a buy.com and just right there smack in the middle on the homepage is Join the Choose of I community app. Jonathan, my former co host and co founder, Choose a Vi has done a really amazing job of building this out. And you just sign up and you click like, hey, I live close to Richmond, Virginia, or hey, I live close to X city in Ohio, you know, Dayton or Cincinnati or whatever. And like, and you're going to get email notifications of the events that are happening and you just show up. That's really the thing. And there are all sorts of events. There are case studies which actually you in Ohio have spearheaded. And Jackie, I know you did an amazing job coming up with a new template for this and that's something that's benefiting everybody. There are hikes, there are walks, there are meetups at breweries, there are book clubs. I've seen all sorts of things. And you just get in there. You can make your own event. You want to just have a little walk in your neighborhood and invite the local FI community, see who shows up. Even it doesn't have to be 30 people, even if it's two or three of you on a Tuesday morning, like we do here in Richmond. That's great. That's fantastic. And you find other people who are doing this and you say, like, hey, where are you saving money locally? What changes have you made here in my local town? Like, and frankly, you just see people also, which is not insignificant, who have reached Fi and can get together at 2pm on a Wednesday, which is pretty awesome. And that could be either where you are in your life or really if you're getting started, it could Be aspirational. And you know what? You can also ask those people for help. You're going to be shocked at how welcoming and wonderful. Aside from, like Jackie said, this being just the most intelligent group of people I've ever met, just worldwide. It's an incredibly generous community, too. So just join, get involved, reach out, and just show up and take action. And I think, Jackie, to me, that's. That's the hallmark of the FI community.
- [61:24]
B
Absolutely. And it's completely free. So this falls in line with the basics where you are just getting going. Even if you're starting with a small amount, this is going to give you a lot of motivation. And, yeah, I'm in Ohio, so there's one in Cincinnati, Dayton, and Columbus. I've been to all three, and the one in Dayton is not. It's only been around for a couple of years, but they finally got it going. I mean, we do it monthly. Some months we'll have, you know, 10 or 12 people. Other months we'll have 20 people. And it doesn't just stop when the meeting's over. We purposely walk to a local. For some reason, Dayton has a lot of craft breweries. Not as much as Cincinnati, but we walk to a local establishment to patronize them, and we continue our conversation. But, you know, it's not always about money. It doesn't always have to be about money, but these are, you know, amazing people that I just love hanging around. So I don't know if it was your intention originally to have these local groups, but I think you strut gold and you have a local person at each place. And because I've been to multiple different ones, it's really cool. They all approach it, like you said, a little bit differently. Of course, my favorite is the case studies. I love case studies because I love people's money story. I love hearing people's money story.
- [62:44]
A
Yeah. Yeah. And that's a huge thanks to the Cincinnati group Diana Merriam. And really, you all got this started. And it's really something special with the case studies. And. And, yeah, I mean, I. I think. I think to close this out, Jackie, it's. It really. It is about taking that action. It's understanding. Like, we even put to words today a number that I hadn't. I hadn't used before. I. I know I've. I've used that $100 a month is $30,000 less, but like we said, it's. It's probably closer to a $90,000 swing in your entire financial life for every hundred dollars a month. So I think there's a lot of low hanging fruit. And now this is again, not to say don't think about upskilling, don't think about negotiating your salary. Like you should be doing all of those things. Like you want to earn more money, clearly. But for those of us getting started, the easiest way is to look at what am I spending and try to make some changes. Like Jackie, I'll needle you a little bit on like the cell phone. It's in this day and age with mint mobile. And I'm not, you know, in the bag for them in particular but, but they are great. Like if you're spending more than $30 a month on a cell phone, like you're just spending too much. It takes 15 minutes to move your cell phone service over. And like a lot of people are still paying the old school, like $100 a month per line. It's like that's real money. You know, that's a $70 swing. That's 70% of this 90, you know, this $63,000 swing on just that one decision for 15 minutes of work. Right. So these things actually matter. And then you can look at, okay, hey, do I have a car payment that's maybe $500 a month or more? A lot of people's car payments are more than that. Like that doesn't mean go out and sell your car tomorrow though. That is an option. But once you pay that thing off, cars last forever nowadays. Drive that thing for another 10 years. That's a massive difference. Massive. Another one, Jackie, is for me is food. I think a lot of people, because they don't meal plan, because they don't eat in, they spend so much money on food. And again, it doesn't mean depriving yourself. It's the opposite. It's actually you're opening time freedom by not scrambling at the last minute to come up with, oh man, what are we going to eat tonight? It's even fast food for most people. It takes 20, 30 minutes round trip that, that seven nights a week, that's three and a half hours. That's a total waste of time when you can just meal plan and it costs a fraction of the money. So I think almost anybody could cut hundreds of dollars a month out of their budget on food. I think that is one of the lowest hanging fruits, you know, pardon the expression, but right, like that's just an easy one. There's so much. If you can't find a way to make a change in your life, I think it's a lack of Imagination. It's not that it doesn't exist.
- [65:27]
B
Exactly. There's a long list of things that you can change. You know, pick your preferred area that, you know, you can make some movement. I know I'm probably paying more, more than I should for cell phone. So I, I, I keep talking to my neighbor about at least visible with something cheaper. And I know that there's a lot of options and why haven't I done it? Probably some psychological reason, but there's so many other areas like, and if this plant some seeds for any creative ideas. So, so there's a new company called Alt Fiber, something like they laid some fiber optics in our neighborhood. We were all so freaking annoyed. Okay. And then AT and T is doing the same thing. So guess what? I have another provider spectrum. I'm like, you know what? I don't really want to switch, but, you know, I'm getting these promotions, they're installing this. I'm like, you know what, I'm going to call them up and say, hey, I'm, you know, I think this is kind of classic. But it took me five minutes. I called them up. I'm like, look, I've got my neighbors, they love their AT&T. They love these other fiber optics that they have. So with my Internet with you guys, I'm paying this much. Like, do you have anything that's comparable? And of course they're not going to say no. And if they did, I would probably switch. But I think I saved like 50 bucks a month just by doing that. But I just, I knew that they were more likely to do something knowing that the competition is increasing. So there's also states that have, I think it's called energy choice, where you can actually choose your gas and electric provider that becomes very competitive. So you can so just get creative, get curious, and it could make a difference.
- [67:02]
A
Yeah. And that's another thing that's really stuck out to people is the phrase everything is negotiable.
- [67:07]
B
Right, Right.
- [67:08]
A
It just gives you that, that little spark of creativity that Jackie just mentioned. It's. You will be surprised when you are a kind person to a customer service agent and you just ask a simple question. If you go in there like a, like a jerk or a bull in a china shop, like, nobody's going to help you. Of course.
- [67:24]
B
That's just like, come on, that's very important, Brad. I get such good response. I'll say, and I'm from the south, you know, so I believe in being polite. But, you know, they'll pick up the phone it's like, how, this is Janie, how can I help you today? And I'll say, hey, Janie, how are you doing today? Know immediately, Janie knows that I'm not somebody that's ticked off because my Internet went out. And, you know, so it really does. They're people, okay? And a lot of times they do have some autonomy for, you know, small things or whatever. So be nice to them. Even if you can just get in their head for a moment and say, these people have been dealing with people screaming at them all day long, all day. It can help. It can help. Yeah.
- [68:05]
A
Yeah. So it's just you never know what you can get if you ask for it. So I think that's just a pretty cool way to leave this. So, Jackie, this has been a lot of fun. I think we covered a wide range of subjects on really, the Back to Basics of fi and I think hopefully planted some seeds for people to say, hey, maybe I've been in the FI community for five years, or maybe I just found it yesterday. Like, I'm going to get up and I'm going to. I'm just going to make a change. I'm going to make that one little change, and then I suspect that's going to start snowballing into something that turns into something really, really significant. So, Jackie, thanks for coming back on the podcast. I really appreciate it.
- [68:40]
B
Yeah, this was great. Brett, thank you for revisiting the Basics. I think you've helped a lot of people, people that's been around for a while and new people, and I was just glad to be a part of the conversation.
- [68:49]
A
Yeah. So we mentioned your book, Fire for Dummies, and also you're the co host of the Catching up to Fi podcast, which is a fantastic. You and Bill do a. A great job there. Is there anywhere else you want to direct people? Are those the two main spots?
- [69:04]
B
Those are the two main spots. You know, for the longest I was telling you, I really didn't have a home, and, you know, I started co hosting the podcast and the book. Those are the main things where I'm trying to share this journey. I have the heart of a teacher, so I am always trying to teach. I do want to always start at the basics. So, yeah, Catching up to Five. We release new episodes every Sunday on our podcast. Not everyone has this figured out right away, so we help, you know, late starters that have realized that they do need to get back to the basics. So whether you're just starting or restarting, getting back to the basics is really important. So yeah, Fire for Dummies does that and Catching up to Fight does that and those are my two biggest passions right now.
- [69:44]
A
Wonderful. Jackie. Again, thanks for being here and thank you for listening to Choose a Phi and for being part of the community. And again, like we said in the show, head to choose a fight.com and just sign up for your local group, sign up for that local app that Jonathan created and just get involved. I think that could be one action you take today from this episode that just makes your life better. So again, thanks for being here and until next time, thank you for listening to today's show and for being part of the choose to Fight community. If you haven't already, the best ways to get involved are first subscribe to the podcast. So you're listening to this on a podcast player. Just hit subscribe and then subscribe to my weekly newsletter. I actually sit down every Monday and write this by hand and I send it out Tuesday morning. So just head over to choosefi.com subscribe and it's really, really easy to get on the newsletter list right there and I would greatly appreciate it. It's the best way to get in touch with me. You can actually just hit reply to any of those emails and it comes directly to my inbox. So that's the way that I keep a pulse of the community and how we keep this the ultimate crowdsourced personal finance show. And finally, if you're looking to join an in real life community, we have choose a vi local groups in 300 plus cities all around the world. So head to choose a vi.com local and you'll find a list of all of Those cities in 20 plus countries all across the world. And if you're just getting started with VI or you have a family member or a friend who you think would be interested in two easy ways, choose a five episode 100 is kind of our welcome to the FI community. And even though it's a couple of years old at this point, it still stands up. And it's a really great just starting point to get an understanding of what is financial independence. What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to live a better life? And then choose if I created a Financial Independence 101 course that's entirely free. Just head to choosefi.comfi101 and again, thanks for listening.