← ChooseFI | Financial Independence Podcast
ChooseFI | Financial Independence Podcast
Wouldn't It Be Cool If ?? | Open the Aperture With Jonathan And Brad | Ep 532
00:45:58
Introducing The 'Wouldn't It Be Cool If' Series Episode Summary: 2025 marks the start of an exciting new era for ChooseFI! In this episode, hosts Jonathan and Brad dive into the journey to financial independence—what it means, how to define your FI...
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- [00:10]
A
Hello everyone, welcome. We've made it to 2025 and today we're gonna be kicking off a new series. You know, the acronym is a little bit wordy. The idea behind the series is wouldn't it be cool if I've been playing around with those letters and it's just, it's wibsif. I don't know, it's wim. So today is our first wipsif episode. And and to help me with this, I have my co host Brad here with me today. How you doing buddy?
- [00:32]
B
Hey Jonathan. I am doing quite well. Yeah, that definitely does not roll off the tongue. Needless to say.
- [00:37]
A
Maybe it's destined for T shirt at some point. You never know.
- [00:40]
B
I could see it. I could see it. Bracelets. If we could do bracelets.
- [00:43]
A
Well, happy 2025. I realize maybe people are listening to this years from now and they're like, man, that was so long ago. But I mean, 2025, it's time has flown, man. I mean, and I was just thinking about this in terms of, you know, own personal financial independence journey. This is kind of a big deal for you.
- [00:58]
B
Yeah, it is. Actually this very week is a big deal for me. So I left my job, I left my corporate job as a CPA 10 years ago almost to the day. My last day was January 31st, 2015. And now we're in February of 2025, which is crazy. I mean, Jonathan, you and I met eight and a half years ago. At this point we've been doing Choose a five together for more than eight years. It's crazy.
- [01:24]
A
I remember when you celebrated your, your 40th and I was thinking, man, 40 years old, he's old. I'm celebrating my 40th this year.
- [01:32]
B
Oh wow. Are you really? Oh wow. It's wild. I still think of you as like 32 or whatever when we met. 31, that's crazy.
- [01:40]
A
21, one of these days, it's just, it just grows up a little bit slower.
- [01:45]
B
Oh, that's wild. But yeah, it's, it's so interesting to think that I've been out of the corporate workforce a decade now and I think it's been an interesting, interesting intersection of FI and entrepreneurship, which I think frankly those are two main themes of what we've talked about over nearly 700 episodes now. And I think I gained an immense amount of strength, power and autonomy in my Life by pursuing FI for a 12 year, fairly abbreviated, but 12 year corporate career. But then it was fascinating. We talk about FU money, as you like to call it. A freedom, Unlimited money. Right.
- [02:22]
A
It's a family show.
- [02:24]
B
So, I mean, at that point I was well on the path to Phi very, you know, reasonably close. But I wasn't there by the definition of 25x Phi. And obviously our view of Phi in the intervening eight years since we've started Shoes of I has changed dramatically in terms of now there's coast phi, there's barista phi, there are all these things. But. But back then it was just 5. It was essentially you're either 25x your expenses or you're not. And it was 0 or 1. And I clearly was not. But what was cool was I had this side hustle. I had this little website called richmondsavers.com and I was helping people with travel rewards and I thought I could make that into a business. I thought I could turn it into something. And yeah, Jonathan, the wild part, right? Like the very next day after I left my job, I started Travel Miles 101. And that's where you found me. And it's so interesting. I. I like to think about life and it's kind of wacky sometimes when you think about this. It's like there was that movie Sliding Doors years ago, and it's all these different paths that your life could take and you really think about these moments that seem meaningless at the time and you just can never foresee where they're going to take you. And I mean, you sending me an email in mid-2016, just a random guy off the street who I'd never met before was. I mean, clearly one of those moments. Choose a VI very obviously does not exist without that. And it's fascinating, I think, I think for all of us. For me, the takeaway is leave yourself open to serendipity. You never know what's going to happen in life. It's impossible to predict where you're going to be 10 years from now, five years from now, even three years from now. And that's the beauty of the path to FI is we have so many options because we have saved money diligently and let it grow and compound. We have options that traditional regular people, if you will, and that's a kind of a weird term, but regular people just simply don't have. And I just find it, Jonathan, so exciting.
- [04:14]
A
You know, you really opened up a lot of options for what we're going to talk about. A lot of pathways there, a lot of sliding doors that we could go down with this one. And I always find it inspiring because when you think about this concept that someone can choose financial independence, that someone can choose to pursue financial independence. It quite literally just starts with the idea, the inception, that it might be possible. And I want people to appreciate that. There's a lot of people that have never considered that. It's never even entered their mind that you might question the narrative of whatever the normal path is for various reasons, but just by giving yourself permission to explore it. Here's the thing. Could I tell you definitively, everybody that's listening to the show that has entertained the idea what exactly you will be doing 10 years. No. No idea. No idea. But I can guarantee you, you will never regret having more options in your life. And through the lens of what you said, like, this is a continuum, it's not binary. So many of us are just, you know, head down, do what we're supposed to do, get the performance review, get the raised, you know, just go through the normal thing that we never question. What would it look like if I actually had a little bit of space? What would it look like if I got to just take a step back? You know that, that line about if you're an entrepreneur or business owner, you're. You're either working in the business or on the business. Well, you can apply that to your life. Are you working in your life or on your life? Just take a step back. And what I'm saying is, when we're talking about this decision to choose financial independence, to consider that it might be possible, or even ask, what would my life look like if it were possible? What would it look like if I could just take a step back and, and just say, all right, here's where I'm at now. And this is a progression of small steps that I'm not even responsible for, like coming up with from scratch. I just need to take a look at all the various things that this community has done and say of those, which ones do I want to steal? Which ones do I want to implement? Which ones do I want to try? There's no downside. And my, you know, where I've ended up has looked different than where Brad ended up and looked different than any of my peers have ended up. But neither of us looks back with any regret about pursuing financial independence. You always benefit from having more options in your life.
- [06:35]
B
Yeah. And what you said there about believing it's possible, I think to me, that is maybe the single most important thing that we do here is try to help people understand. So if you're listening to this, FI is the one reliable way for middle class people to get wealthy Just very simple, hard stop, end of story. This is the one reliable way. You live slightly below your means. You have a savings rate. You invest for the long term. You're not trying to gamble and win at some penny stock or something crazy. You're investing for the only timeline that matters, which is long term. You're investing for 40, 50, 60 years. That's what we're doing here. We are thinking long term and truly that Phi number. So. Right, Jonathan. Believing it's possible. I think for most people, they have no sense of is retirement. Is financial independence ever even plausible for me? Because you hear a drumbeat of negativity in the regular financial media. Just a drumbeat. It's impossible. You can't do this. Healthcare is gonna cost too much, blah, blah, blah, whatever's gonna cost too much. Inflation, yada, yada, yada. And I think. I think what we do here is we make. We make it an internal locus of control where instead of this external thing that someone else is acting on you, you actually have the power and autonomy. Because your entire financial independence number drives off of very simply, what does my life cost? Okay, so your Phi number is just, okay, my life costs $60,000 a year. You multiply by 25, and my PHI number is $1.5 million. And that's my North Star. Okay, we can then get into the minutiae of parsing. What's the exact safe withdrawal rate? And we can go as deep as you want to go, but frankly, I'm the host of Choose a Five, and I don't go that deep. I don't care because it's a North Star. And I know I am on this trajectory or I have been on this trajectory and path that has given me that North Star to shoot for. And now I've reached a point of financial independence and it's this wonderful degree of certainty. There's never certainty in life, right? Let's be clear. We could get hit by an asteroid tomorrow and who the heck knows, right? Or zombie apocalypse, et cetera. You know, all the things that I jokingly say, but I have this degree of certainty and control over my life that I simply wouldn't have had if I didn't find Fi, If I didn't save money and if I didn't think about how can I live life a little bit differently, Jonathan? Right? At the end of the day, that's what we're doing here. We're living life a little bit differently than our neighbors. I think, frankly, we're living the same middle or upper middle Class lifestyle as everybody else around us, but we're getting wealthy in the process because like you said, it's these little actions. But when you stack those little actions, it turns into something remarkable.
- [09:17]
A
We were at a friend's house, some acquaintances house. We've met them because, you know, they have a kid that's in my son's class, and they're just a delightful family. And we were having a conversation and at some point, you know, the. What have you been up to? And I was explaining that I've been working on something for Choose a Fire and explain a little bit about what Choose a Fire was, what this concept was. And the direction took a hard fork, hard work to the left. And the fellow that I was talking with, great guy, but he was just saying, I mean, is that something that, like, people, like, do that, that they're open to? Like, is that something that people. Because. Because I don't, you know, and I could tell that I had hit a little bit of a trigger point or a pain point. It wasn't in my intent. I genuinely was just saying, hey, this is what I've been working on, you know, specifically. And then, oh, by the way, the backstop is, here's what, you know, we talk about. This is what it is. But now we're talking about, is this concept of financial independence just a valid concept like that people actually do this. And I was like, well, well, this conversation just got, you know, simple for me or exciting for me. You know, this is something I obviously enjoy talking about, but it was something that this individual was truly grappling with for the first time. The identity statement was, you know, I've just never really been that good with money or put that much into my always. It's something that I need to look into, probably more in the future. But I. I don't even, you know, it was. It was a bunch of these things that are very common that all of us have probably many of us have felt these identity statements about ourselves that, you know, I'm a bad gardener or I'm a bad whatever, or I don't do this. Like, it's just, you know, okay, that's fine, but. And I wasn't trying to be in the position of saying, you're wrong because this is how someone feels. Right? I was truly just saying what it was. And so, you know, I answered it in the way that many of you are probably familiar with us on this show. And I just was kind of talking through, well, yeah, you know, it's. It's not binary it's, you know, it's just, this is just a playbook for life. I mean, there's nothing. Get Rich Quick is usually a scheme that ends up with your money in someone else's pocket. But there is clearly a playbook of truth that leads predictably to some people having better outcome than others that don't benefit from the playbook. Right. Not all of us are given a silver spoon. Not all of us are handed a monster inheritance. Those of us that are building wealth for the first time have to predictably spend less than we make over time wisely invest that not for a guaranteed outcome, but for a high probability of success. And when you rinse and repeat these best patterns, predictably the odds of your success increase. And so what we do is we just identify those patterns and we implement it. Money in your checking account is not going to do as good as money in your savings account. When you pay a crazy amount of fees on everything, you're predictably going to have less money than when you don't. When you don't optimize your taxes. Well, that decision will take care of itself. Right? It's just a series of these patterns that we implement, and in aggregate, they lead to exponentially different outcomes. All right, so that's the how without going into the specifics. But then the why is equally important. And it was, this conversation was a little bit of both. And the why was just, you know, I like the flexibility, I like the control. I like to be able to have a little bit more say over where my best energy, my best years go. I want to work. It's not that I don't want to work, but I want to work on the things that light me up, not the things that necessary, you know, light my corporate private equity company ownership up. They're just, they're different. And there's alignment for a period of time when your need for the income is, you know, high enough and your ability to self dictate is low enough. But if it's a continuum, you end up seeing them kind of start to converge. And long before one passes the other, you can start to say, you know what, maybe I don't need to do the worst of the worst of the worst every single time. Maybe I don't need to fall on that sword every single time. And then somewhere along the way you get to maybe an impasse where you have to choose between your best interest and private equity's best interest. And, and you say, yeah, I think I'm going to choose mine. And guess what? They Filled that slot the next day. Right? That's fine, that's fine. And that's kind of the situation I ended up. And we don't need to get back into that. But I was just relaying just a little bit of that, like just say forget like full financial independence. Maybe that seems impossible to you, but imagine like, you know, I can see there's, maybe there's some stressors going on right now. Imagine if you just had six months, one year, you didn't need to worry about, about how you're going to put food on the table, how you're going to provide for your family, how you're going to just imagine you had a window, a two year window where if you brought in zero income for the next two years you could refigure out everything. Right? You could reset. Would you be doing exactly what you're doing now? I'm not telling you to change anything. I'm just saying entertain the thought experiment. You have no need to earn any income for the next two years and you can fork and move in a completely different direction. What would you do with that window? If you have no ideas, man, we've got an opportunity to do some exploring because this is free. This is just entertaining the idea. Where could we be in two years?
- [14:26]
B
Yeah, it's opening the aperture.
- [14:28]
A
Oh, I like that. Do we already have the title locked in?
- [14:31]
B
Because you're welcome my friend, you're welcome. Right. So many people live these close off lives and I think that's what I've noticed is so beautiful about all of us in the fight community is we think a little bit differently. We have a zest for life, we're trying to live our lives. And Jonathan, you always say this, that time is your one non renewable resource and to give it up willingly to a job that you can barely tolerate just doesn't really make any sense. And the cool thing is again, there's so many more ways to think about fi, to think about life now than there were when we started this eight years ago. I know our great friend Jillian Johnsrud has talked at length about mini retirements. In fact, I've been on a mini retirement slash quasi mini retirement the last couple of months starting with my big trip to Bali and Asia. And you can take these time periods, you can do different things. And I think that is my one call to action today in terms of this theoretical stuff is if you're listening to this for the first time or you're fairly new to fi, this really works. This is not get rich quick and we're certainly not selling you anything here. This is not what we do in the FI community. This is about taking the power back in your life. But let's be clear. You need to take action, okay? You cannot just listen to us. You need to actually get up off that couch and take action to make your life better. And the cool thing is it doesn't have to start with massive things. It can start with little things. Jonathan, I think you mentioned fees in there somewhere, maybe with bank accounts or something. And, and I was thinking back to one of our earliest episodes. Probably in the first five episodes, it was me on like a rant about don't pay any fees. And like, it sounds silly, it sounds small, but look at your financial life. Are you paying unnecessary fees anywhere? Are you, hopefully people aren't paying ATM fees anymore and you don't really need that much cash. But like, are you paying bank fees? Are you paying late payment fees? Like, these are self inflicted wounds. If you're doing that, it's just an unforced error. You don't have to do that. And like, there's so much low hanging fruit in terms of your budget, in terms of what your life costs. And I think it just, it needs a little bit of intentionality, okay? So you cannot just graze through life and reach financial independence. You can't. It's not going to happen, I can promise you that. But can you apply a little bit of intentionality to it and make some significant changes? So we always say, and I think this is a really stark example, is for every 100 doll that you cut out of your monthly expenses, okay? So your monthly budget, if you can cut $100, you need $30,000 less in your net worth. Your financial independence number, your financial independence Number decreases by 30,000 for every hundred dollars that you cut out of your, your monthly expenses. Jonathan, that is remarkable. And I mean, most people who are finding FI today can make changes instantly that cut out a couple hundred dollars. So we're talking potentially of 300 bucks. It's 90 grand less. You need to reach five. And that's just simple stuff. Then you start getting into, as we talk about, maybe you start getting into, what kind of car do you have? Instead of having an $800 a month car payment, do you buy a used car and pay it off or even a new car and pay it off and drive it for another 10 years? Well, that's 800 bucks a month. That's not insignificant, right? That's almost a quarter of a million dollars less. You need in your fly number. So the little things are the big things. That's the key. But at the end of the day, Jonathan, it's action. Thanks for listening to Choose a Five and for all your support of our mission here. The absolute best way to support Choose a Pie 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.
- [18:18]
A
You know, Brad, you really, you teed us up to talk about the wouldn't it be cool if Aspect, right? So this is a series and we have probably 12 to 16 of these episodes just in our minds. But I think what we want to do is we want to extend an invitation and it will be a regular invitation, but we're going to do these in two parts. Kind of like we did the Friday roundups back in the day slightly differently. We're going to actually reverse it. So what we're going to do is Brad and I are going to schedule, you know, several of these episodes. We have it mapped out in our mind. It's something we wanted to do. And we had a couple of false starts. We've named it various things. We've called it five Fundamentals. We've called it Financial Independence A to Z. But really we just wanted to to go through this content in a very comprehensive way. But the hang up was always that we could either do a very thorough job or we could, you know, kind of do something where it's crowdsourced. But it was very hard to do both together because they require a lot of communication and organization and it's a relational thing to build an episode together. And so what we want to do is invite you to build the episode with us. So we kind of just did a little bit of a why if I right now, which is always an important conversation before you go into anything tactical. Nobody cares about the math until they get the why. And I'll just tell you that the individual that I was speaking to, this conversation came back a few days later. I think we had something going on with the kids. And this guy's super committed and dedicated to his family. He loves to be present, he loves to be at these events. And probably due to a work conflict, he just couldn't choose to be there at this particular time. And he said to me, hey, I just wanted to let you know I've been thinking about what we talked about for like the last three days. It's just been in my head and I was thinking about it, you know, when I couldn't come to this event, that it would be really nice to have some of these options. So the why, the why was seated.
- [20:08]
B
Nice.
- [20:09]
A
So now we have permission and you're giving us permission by continuing to listen to talk about the how. And we're going to do this together. So today we're going to finish this episode just briefly transitioning and talking a little bit about the phi number. But that's because this is going to be the topic that we're inviting you into to start with our kind of our A to Z series. Calculate your financial independence number. How much do I need? And so we're going to talk about this concept just for a few minutes to tee this up. And then when this episode goes live, we're going to keep the feedback options open specific to this episode for about three or so weeks to give you a chance to listen to the episode, to interact with the episode. And we're opening a brand new platform which you'll be able to hop into. We're going to make it very simple and we'll have more details to follow. And Brad will be sharing it in the newsletter as well. It'll be very easy to find just on the homepage and you'll be able to find this episode and you'll be able to leave a voicemail if you think you have something that we missed. You'll be able to ask your questions and you'll be able to get feedback either from us or from other people in the community. We'll collect the feedback for a couple weeks until we have enough and then we're going to come back and we're going to do a comprehensive episode. And what I love about this approach, and I'll get Brad's feedback as well, is, you know, eight years ago when we first started and we just wanted to share kind of what was on our minds, we would release content and it was good. I mean, it was good episode, it was entertaining, it had a lot of truth in it. But we would immediately get feedback and we kind of cringe because there were obvious things that we missed or we would have loved to add, but it would this point, it was too late. And so by doing it this way, those of you that are super invested and getting this comprehensive look, you know, a lot of these considerations will have an ability for us to kind of see the idea. You'll be able to ask your questions and you'll also be able to provide you know thoughtful insight either by voicemail or by a discussion comment.
- [22:02]
B
And.
- [22:02]
A
And we will bring those back in and create our evergreen version of this piece of material. In this case, we'll be talking about calculating your financial independence number. So, Brad, I'll hand that one back to you. There's a lot there, but I just kind of wanted to set the stage for why we're calling this. Wouldn't it be cool if.
- [22:19]
B
Yeah, and I love that when you came up with that phrase. So, yeah, I mean, to me, and why I'm so excited about this and why I think you should be so excited about this is this is actually fulfilling the goal that Jonathan and I and the Community set back in 2017, which is to make Choose Fi the ultimate crowdsource personal finance show. Or Community is ultimately what it's turned into. And frankly, like Jonathan said, we've tried a couple of times, and we just never. We never had the tech. And I think we've had to basically cede that to Facebook, which, frankly, most people absolutely loathe Facebook and want nothing to do with it. And that's probably more true now than ever. And I think it's never sat well with me that our entire community is on Facebook. And it's. It's worked to some degree, but it just. It never worked beautifully.
- [23:11]
A
And.
- [23:12]
B
And I mentioned this on an earlier episode a couple months ago when I had Jonathan on was Jonathan has worked his tail off the last year or two to create something remarkable. And it was with the goal in mind to be of service to our whole community, to you. And what's wonderful is we have the smartest, most interesting people in the whole world in the FI community, And wouldn't it be cool if we could harness that ability to create something great for all of us and to do this in public, to work together, to create something awesome and to constantly keep updated. I think, Jonathan, that's one of the biggest things, right, is things are constantly changing. And that's yet another thing that I love about the VI community, is we're always looking down the field, right? Like, things change constantly. That's just a fact of life. Nothing ever stays the same, and we need to stay on top of it, right? So there's some new rule on rolling five 29s into a Roth, and like, that's uncertain right now, but. Well, what if we created a page on our. On our website, as we're going to talk about, and created something cool about that and kept that constantly updated with not only our friends and colleagues who are experts, but you in the community who is maybe going through this and maybe has done it or maybe has a question. That is our goal here is to provide something that can be a true resource for all of us and for us to build this together. Not only the actual answers and questions and content, but frankly, the platform itself. That is what's amazing about what Jonathan has done is he's, he's gotten to the point where he can build pretty much anything and he can do it unbelievably quickly. Like, I'm, I'm blown away constantly on like, hey, we have this idea and then 24 or 48 hours later, Jonathan has probably worked 40 of the last 48 hours.
- [25:02]
A
It doesn't reflect a literal 40 hours.
- [25:04]
B
Of work, but quite literally and it's just done and it's implemented. So I think that's what I'm excited about. I'll let Jonathan jump in here in terms of what we're actually doing. And we're not going to, we're not going to belabor this today, but the important part is we can get started. You can get started with this today. That's the. Wouldn't it be cool if is, Wouldn't it be cool if when I stopped listening to this podcast, I went to choose a vet.com and created an account and got started with this? And wouldn't it be cool if I was one of the first couple hundred users and helped build something for not only myself but the FI community at large and was part of something from the ground up? I think that is what has always been so awesome about the FI community is we, it's like this rising tide. We feel it because for the first time in our lives, we're not these random islands unto ourselves that people look at and like, oh, what's that person doing right? We found our tribe, we found our people. And frankly, I don't want to outsource it to Facebook anymore. Now we finally have the ability to do this and it's going to be awesome. It's going to be something like not only building these topics out, but you have a question, right? Undoubtedly you have many questions. You can send it in on a very particular topic and we can not only crowdsource it from the community, but we can send it to our world class expert friends. You have a question on safe withdrawal rates, we're going to send it to Big Earn and he's going to answer it and we're going to have an article written up for that. We're going to have maybe It'll end up on the podcast. Like, it's going to be this incredible positive feedback loop because you're going to ask your questions and they're going to get answered, and they're going to get answered amazingly well and probably shockingly quickly. And that's just going to embolden you to be part of other questions and answers to ask more things. And I think we can build Jonathan, like, a real repository of incredible information for the FI community. But that feels vibrant. That feels like it's happening today because it doesn't feel like it is. It is.
- [27:02]
A
I think the word repository resonated with me in that, like, I feel like all the good ideas are so spread around the, you know, the www that only the super enthusiastic could possibly have a chance of really finding it. Right. And so we try to talk about them on the show, but even that is chronological, like, it's by its nature. There's 500 podcast episodes and a good one was, you know, 48, 49, 147, 1 4. It's on you to put together your own playlist right now. But these best ideas, you know, every other kind of social media platform has really an impetus to always put the focus on the latest and greatest. Like, your satisfaction is more of a byproduct of a larger thing. We want a platform for us. And what I mean by that is we want a platform not to highlight the last comment, you know, and the Latin, and to just kind of increase clicks, etc. But really to curate the best answers to these topics in an organized way that we can access when we need them and that we can share in a very, very easy way. And you really have to have control over the code in order to be able to do that. Like, there's, you know, Reddit superheroes out there that take ownership of these subreddit channels and they do a, you know, Herculean job for what they do. And they have more tools than Facebook group admins have. But, like, even when you get it all perfect, the underlying business model completely changes and it just moves to something different. So you're always kind of at the whims of, you know, the billionaire class and whatever it is that's going on behind the scenes. You're a product. In this case, we want a tool, something that's working for us. And what do we want? We want to smooth the ride to financial independence. We want to make it easier to talk about. We want to make it easier to share. And it would be nice in these, wouldn't it be cool if episodes because right now I get it. You may be hearing about this for the first time and you don't know how to think about this or do it. But maybe as we do a couple of these collaborative episodes together, you really are a part of it. You're going to help us create this next podcast episode. As we do this, we start to think more aggressively and we start to think about, ooh, what if we built the calculator into this forum because that's what we're talking about. And then what if I had that when it came into tax season, I could print off my worksheet and I could take that. What if I could do tax loss harvesting? What if I could? And again, these are all just ideas. Wouldn't it be cool if is what I want to encourage you with. What are the pain points in reaching financial independence? Let's not take anything for granted anymore. Let's share it, let's talk about it, and let's highlight it with the recognition that this is not going to be lost. The FI community is very good at recognizing good content. What if we could not only just upvote something or like it or react it up, but quite literally now have these evergreen contents that aggregate and build on each other and lock in the path and then we take those and we get those turned back into episodes and all of it just kind of builds together until, you know, you have these things for career transition, lifestyle design, you have these things for living in drawdown and how do I balance volatility and all these sorts. You have these communities of experts that are sharing ideas. Best ideas are democratized and voted up the top. And that's our target. We don't need to be all things to all people. We don't need to vote on the latest and greatest cat videos. Nothing against them, just saying like we have a reason for being here, our tribe has a reason for and we have a lot of common cause, common ideas, common things that get us excited. Let's talk about those, let's focus on those and let's build out community and awesome repositories of knowledge that we can all benefit from with a tool set that grows right along with us. And so that is the Wouldn't it be cool if today we're going to only spend five minutes here and we're wrapping up the episode. We're going to talk. We're in close this one by talking about the financial independence number. Going back to the beginning of the episode, we had this YFI kind of Start. And now we're just taking a look at, like, what number do you start with? And the reason I think that I want to introduce this, but then just leave it, is recognizing that we always talk about how to calculate your fine number, but ultimately it's directionally accurate. But anybody that's thinking about it for more than 10 minutes knows it's a ridiculous number to just hang your hat on as the ultimate end all be all. And so that's worth exploring. We should be honest about it. But at the same point, recognize why even with that in mind, it's always going to be our go to number. So, Brad, I'll give it back to you. That was a lot there. What is your financial independence number? You mentioned something earlier, about $100 off and $30,000 less, but that's somehow related to our financial independence number. Define that for us. What it is, how we get it.
- [31:46]
B
Yeah. So at the very highest level, how we conceptualize your phi number is you take, what does my life cost each year? Okay? So you need to have. And I think this is really one of the very first steps when you find fi, is you need to figure out, all right, hey, what am I spending every month? Every year, really? And you don't have to tie it to the dollar, Right? Like, that's the important part. We. There has to be some reasonableness test here in terms of. All right, let's just. Let's get pretty close. But you do have to have a sense. I mean, I don't want you to say, hey, my life costs 70,000 when it really costs 100,000. That's. That's not the game here. But you try to understand what is my life cost on an annual basis. All right? So in theory, if you had $0 of income coming in, you need your net worth, basically your assets, to be able to cover that amount of expenses so that you can be financially independent at that point. So you need again, $0 of additional income coming in from a W2 or some other type of job. So how we very simply calculate this is we take our annual expenses and we multiply by the number 25. Okay? So roughly 25 times your annual expenses. So the simplest mathematical equation ever, you type in that number. If your life costs $40,000, you multiply by 25, and that's $1 million. So that's your fine number. That's your rough fine number. The math works to infinity, right? If your life costs, let's say, $120,000, then you need $3 million. There's no, there's no secrets here. Okay. And we're also agnostic in terms of are you living frugally, are you spending a lot? It. There's no judgment. I think that's another critical thing. I feel like, Jonathan, when we first started Choose a Phi and certainly like predating us, the FI community, sort of the fire community, as it was back then, was all about frugality. And I think it's important that we again have opened the aperture of this is not about frugality. It's about intentionality. Okay. And obviously there is a place you always have to have a savings rate. So there is a place for some cutting expenses, clearly, or maybe just earning more money. But this is not about being a miser. So anyway, my editorial is over. But it's hard not to editorialize sometimes, Jonathan. So, yeah, just very simply to get your back of the envelope. Phi number. You take your annual expenses and multiply by 25.
- [34:11]
A
All right, Brad, well, I'm a test you here. We said there's no judgment, but a recent news article shared that Cardi B shared. Her spending rate is 3 million a month.
- [34:22]
B
A month. Okay.
- [34:26]
A
I mean, can I. I'm trying to figure out.
- [34:28]
B
Her fine number is $900 million.
- [34:33]
A
Is that what fatfi looks like? I want to do that.
- [34:35]
B
Okay, yeah, I'll have some judgment on that. But within. Within reason.
- [34:40]
A
I think I know how the story ends. Let me just tell you there. Yeah, but the matter of this is like, this is just a fact. If you spend more than you make, it's not going to end well. Right. If you spend more than over a long enough period of time, it's not going to end well. So what the financial independence number encapsulates is. It's a rethink. It is not about how much you make. This is traditional written. This is Brad's thing. He always talks about this. I gave him the chance. He whiffed. He didn't. He didn't go there. So he left it wide open for me, and I'm gonna take it. But the traditional retirement calculators always start with how much do you make? Right. How much do you make? And then they give you a number based on how much you make, your current age and expected age of retirement. But the fundamental calculation is entirely based on replacing what you made from your job, which I guess I understand, but it's entirely misleading because what you need to replace is how much you spend. How much does your life cost? Now, if Cardi B is making, you know, many multiples in excess of what she spends, then really, who are we to judge? But there is kind of a short window when you're making these mega amount of money unless you go to the next thing. And so for all of us, we need to be mindful that how much we spend changes over time. That's really the heart of. Whereas there's nuance here, but it is a much better a much. If we could say this is a relatively steady state average spend year for us, you know, that one year you only spent $10 because there was some crazy asterisks next to everything. That's probably not a good, like financial independence number to base it on, right? We need to figure out an average spend year. If you have $5,000 a month of expenses, so that's what, $60,000 a year, you would multiply that times 25 and that would give you 25 years of expenses. But now we get into some interesting. We can really think about. It's just a math equation. So if you're spending $0 a year, you're already 5 because you don't need money, right? You're foraging out there and you're, you know, doing the proper thing and you got 25 years of food and beans, you're ready to go, you're already five to some degree. But conversely, if you have a spend of $5,000 a month, we can take advantage of this 25 times your annual expenses. So I'm going to have to say $5,000 a month, $60,000 a year, 25 times your annual expenses. And now we can say, and what we're doing is we're basically accounting for inflation just by not factoring in at all, right? So this is an inflation adjusted number. We're saying with some relative degree of confidence, if you have that amount of money, you know, invested, making average stark market returns, you know, based on index funds with low fees, et cetera, then you're likely going to be able to draw down 4% of that total invested amount every single year. And that money is going to last until you die. And this is. There's a study called the Trendy Study, and we don't need to go into that. There are absolutely people listening to this that care. But we can do more when we come back to this. We don't need to waste the time in this segment. But what we're saying is 25 times your annual expenses, if you had that amount of money sitting in an investment, you know, sitting in solid investments, then there's a high probability of success. Like very, very, very, very high. Like I don't know if we could pick any 40 year period on the best day and the worst day where it hasn't worked. You know, there's a very high probability of chance that you're going to have money left over for you when you die. That's a perpetual money making machine at that point. And so we need to figure out how to emulate that and recognize a couple caveats. It's not binary, right? I just said keep in mind, if you didn't make a dollar in return, assuming 0% inflation, you would have enough to cover 25 years of your current expenses. Even if nothing happened. That's pretty good already. But if you can outpace inflation and make better returns on that, then you're going to be really good, you know, even factoring in inflation. But then the other caveat is, all right, now we have a number. Is this a really good number? Is this the final version of our number? It's certainly and obviously the number to start with. But now I think we've actually given ourselves permission to do a little bit of a deep dive into our expenses. Like what makes up an expense. Is this expense really something that's going to be there? How do we factor in? Well, this is, you know, what I do for my church and my tide. This is what I factor in for my kids saving for college. This is what we factor in for renovation. These are expenses that I'm counting. What does that mean in terms of the number? There are so many variations of this. But you start by coming in, getting that first simple raw financial independence number, monthly expenses times 12 times 25. It's very simple. Now we can go a little bit farther and we can do a deep dive on what those expenses are and what might change with a high enough probability that would be worth kind of optimizing this. And now you're giving yourself permission to do what Brad talked about to say, well, what can we cut? Right? Like we're going to do a budget, but not to do a budget. Not to tie ourselves in that like long term to a budget, but more just to know where our money is going. I think people call this the anti budget. And at some point you get to the place where you're not as worried about the dollar and cents, but you are worried about the macro trends and you are worried about the direction of your monthly cash flow. It's more of an audit. We're going to do an audit of our expenses. We're going to talk about those expenses. Which ones should be included in our financial independence number? Which one should be asterisked, which one should be removed? And we're going to see how that changes number. We're going to bring those into a very comprehensive calculate your financial independence number with the simple raw one and then kind of an intermediate good balance and then maybe that technical one that everybody just loves. I think that's the focus and we want as much of your input for that as possible. We want to encourage you to build the episode with us and then we'll celebrate putting this together as a community and we'll air that and it'll be financial independence A to Z, calculate your financial independence number.
- [40:32]
B
Yeah, this is super cool. And obviously this is but the first of these things that we're going to do with this new platform. So if you're hearing this, the call to action is go to choose a Vicom and right there, smack in the middle of the homepage, you're going to see to sign up and create an account. Okay? Now, even if you've heard all this and how to calculate your fine number isn't all that interesting to you, I promise you, what Jonathan built and what we're going to build together again, that's the cool part, is what do you want a platform to look like where you can interact with the FI community? Jonathan can build it. It's awesome. And what it looks like today is certainly not what it's going to look like six months from now or 12 months from now or 36 months from now. It's going to be massive and it's going to be incredible. But we can all build it together. And I think that's what's fun. It feels like you're at the ground floor or something. So unquestionably where this is going is okay, let's get the heck off of Facebook. Nobody wants to be on there. Nobody wants to spend any more time in Zuckerberg's walled garden. Right. We want to. Let's. Let's go somewhere fun and clearly we're going to have these. Wouldn't it be cool if. But that's just the beginning. It's going to be the choose of I local groups are going to be there on this new platform, on this new login, and you're going to be able to actually get informed when there are local meetups. You're going to be able to help propose new local meetups. It's going to be more real time.
- [41:54]
A
We could share presentations. You know, one thing people do, local meetups. They love the idea of doing a presentation. But you know, think about the benefit of having a repository of these presentations that someone in your group is presenting but you're able to crowdsource the best of, to share that sort of information.
- [42:11]
B
Or someone in a local group a thousand miles away did.
- [42:14]
A
Right.
- [42:14]
B
Like we could do that as well. That's the beautiful part. You can. If you create this event or you have this, this upload, it can be tagged to go to every local group. We can actually share. There can be best practices. Jonathan, this is so exciting because there are amazing things that slowly filter out. Right. So the Cincinnati local group and Diana Mariam specifically started the case studies. Okay. These have swept across the local groups all across the world. We just had a case study this past weekend here in Richmond. We had 35 people show up, 35 people to help crowdsource this incredible case study, to help this couple walk through their numbers, answer questions. I know my friend Chris went up to them at the end and offered to help mentor because he's been there and it's been in the exact. Like this is the type of positive feedback that we're looking for. This is what's so awesome. But what if we didn't have to just. I didn't have to hear from Diana. Oh, we did this case study and then start to send it out. What if we had a platform where we can share this kind of stuff? And another thing that I am super excited about, I think this is one of the things I'm most excited about is again asking these questions. Right. So a lot of us in the fight community, I get questions all the time from you via email, specifically email and now on, on the website about just, hey, what's going on? I don't understand this. I wish somebody could help me with this and frankly I can't answer all those questions. But what if we had an entire community that can or what if we had an entire set of our friends and colleagues who are brilliant, world class experts at this stuff to be able to help answer them. That's what I'm excited about. So this is all encompassing. If you're hearing this and thinking this is just about like, hey, how do you calculate your phi number? I'm not that interested in that. It is so much more and it's going to be so much more. So yeah, my last call to action is just very simply, you're hearing this. Go to choose a vet.com and just sign up today and help build this. Help build it from the ground floor. Yeah.
- [44:09]
A
This is not just a fad. We will be talking about this 12 months from now and 24 months from now. This is it. This is the hill to die on. We're going to get this thing and we're going to get something that creates and generates value for you. All right? And having said that, there's a lot of ideas that we have that are half baked along the way. And that's not a bad thing. It's just a. It's a natural process of ideas coming from the initial idea to the final idea. And we're in the process of actively turning off a bunch of those that aren't ready for this launch to focus on minimum viable to serve you with this. Wouldn't it be cool if episode. Right. So when you get in, I think you're gonna be blown away, but I also think you're gonna be. You're gonna see and you're gonna recognize there's a lot of room to grow. A lot of good things are possible here. I'm proud of what it looks like right now, and I know what it's going to become in the somewhat near future. But we're going to keep the focus on the things that are really ready to explore. Right. And so we have a lot of ideas that are half baked and we're going to tell you what those half baked ideas are. Maybe you can vote on them, tell us which ones you want us to push up. Right. But we're going to build this out together. And when we do these, wouldn't it be cool ifs these will make a lot more sense to you if you're listening in real time and you're then interacting with the ecosystem. Because there's going to be something new that we're doing together and it's going to be based on what does the community want, what makes this more of a lock, what makes this more useful. We're going to get in there, interact with it, vote on it, talk about it, share feedback, and then create podcast episodes together which the entire community, even those that aren't logging onto the platform, can benefit from. So that's our invitation. This is our first. Wouldn't it be cool? Lift. And Brad, I think you're going to meet your mom for lunch in a few minutes here. So I'm going to be true to my word and wrap this thing up nice.
- [45:53]
B
Five Friday afternoon for me.
- [45:56]
A
Spend the afternoon with your mom. That sounds perfect. Yeah. All right, my friends, thank you so much for joining us today. The fire is spreading. We'll see you next time. As we continue to go down the road less traveled.