Financial Independence Exists on a Spectrum (Bestie Ep) #1005

Summary

Podcast Title: How to Money
Episode: Financial Independence Exists on a Spectrum (Bestie Ep) #1005
Release Date: July 4, 2025
Host: Joel and Matt (iHeartPodcasts)

---

Overview

In Episode #1005 of How to Money, co-hosts Joel and Matt delve into the concept of financial independence (FI), challenging the traditional all-or-nothing mindset. They propose that FI exists on a spectrum, comprising various stages that individuals can achieve progressively. By breaking down financial independence into manageable steps, Joel and Matt provide listeners with a practical framework to enhance their financial freedom without feeling overwhelmed.

---

Introduction to the Financial Independence Spectrum

Joel opens the discussion by highlighting the common misconception that financial independence is a singular, distant goal. Instead, he emphasizes that viewing FI as a spectrum with incremental milestones can transform both the psychological and practical approach to achieving financial freedom.

Joel [07:00]: "Financial independence exists on a spectrum. It is not an all or nothing thing."

Matt reinforces this by drawing parallels to sports, particularly baseball, where an overemphasis on home runs has made the game less enjoyable for some fans. Similarly, focusing solely on accumulating a large financial nest egg can make the journey to FI seem unattainable.

Matt [07:00]: "Financial independence exists on more of a spectrum."

---

The Stages of Financial Independence

Joel and Matt outline a proprietary framework comprising six stages of financial independence:

1. No FI
   Individuals living paycheck to paycheck with no financial buffer.

   Joel [22:12]: "This is where everyone starts... Unless maybe like, you're a trust fund baby."

2. Credit Card FI
   Achieving a basic emergency fund that covers unexpected expenses, reducing dependence on credit cards.

   Matt [24:09]: "This is when you still don't have much credit card fi, but you've amassed enough to give yourself some basic breathing room."

3. Layoff FI
   Building a fully funded emergency fund (three to six months’ worth of expenses) to withstand job loss without derailing financial progress.

   Joel [25:57]: "The next step is achieving what we call layoff I... when you have three to six months worth of expenses on hand."

4. Peace Out FI
   Saving beyond the emergency fund, enabling individuals to voluntarily leave jobs for personal reasons without financial strain.

   Joel [30:13]: "Peace out fi means you not only have that base amount saved up but have enough to engineer your own layoff if you want to."

5. Sabbatical FI
   Allowing for extended absences from work to pursue personal growth, education, or entrepreneurial ventures without immediate financial pressure.

   Matt [33:15]: "Sabbatical ci is like the ability to take an extended absence from work and be just fine."

6. Full FI
   Complete financial independence where individuals can choose to work or not without financial obligations, allowing for maximum personal freedom.

   Matt [44:37]: "The last stop on the financial independence spectrum is achieving full and ultimate financial independence."

---

Key Insights and Discussions

Financial Independence as a Journey

Joel and Matt stress that financial independence isn’t a final destination but a continuous journey with multiple milestones. This perspective encourages sustained motivation and allows individuals to celebrate small victories along the way.

Joel [47:36]: "The ultimate goal is not dying with millions in the bank. Don't be afraid to lean into your financial independence level and enjoy the benefits of it."

Wealth Beyond Money

The hosts differentiate between wealth and money, emphasizing that true wealth encompasses an abundance of resources beyond financial assets, including health, relationships, and personal fulfillment.

Joel [09:08]: "Wealth is really an abundance of resources. It doesn't specifically have to mean US Dollars."

Matt [10:28]: "The SPHIRE framework divides your life into different sectors like spiritual, physical, intellectual, relationships, and emotional."

Saving vs. Investing

Joel and Matt tackle the often-confusing dichotomy between saving and investing, advocating for a balanced approach. They recommend beginning investments once listeners reach the "Credit Card FI" stage, ensuring both liquidity and growth.

Joel [43:08]: "The right way to think about the saving versus investing conundrum is to take the both and approach."

Matt [43:15]: "It's like the Muhammad Ali approach: do it just like Muhammad Ali."

Practical Strategies for Advancing Through FI Stages

The hosts provide actionable advice for progressing through the FI spectrum, such as:

• Debt Repayment: Prioritizing the elimination of high-interest debts.
• Emergency Funds: Building and maintaining a robust savings cushion.
• Investment Initiatives: Leveraging tax-advantaged accounts and diversifying investments to ensure long-term growth.

Matt [24:14]: "Should have called it the stepping stones of financial independence... Maybe a bit more tame, but okay."

---

Real-Life Analogies and Examples

Baseball Analogy:
Joel and Matt compare the pursuit of FI to baseball, where focusing solely on home runs (ultimate financial goals) can make the game less enjoyable, while appreciating all aspects of the game (incremental FI stages) enhances the overall experience.

Fisherman Parable:
Drawing from a classic parable, they illustrate how working incessantly for a distant goal can lead to missing out on present joys and relationships.

Joel [14:14]: "The ultimate goal is to get back to the exact life he's living now... enjoying fishing and having beers with friends."

Hiking Analogy:
Using a hiking metaphor, Joel describes FI as conquering one step at a time rather than attempting to scale an intimidating mountain all at once.

Matt [54:32]: "Financial independence is like taking small steps up a mountain trail rather than attempting to scale the entire mountain in one leap."

---

Encouragement and Mindset Shifts

Joel and Matt encourage listeners to redefine their relationship with money, emphasizing that financial independence should enhance life’s quality rather than restrict it. By celebrating each stage of FI, individuals can maintain motivation and appreciate their progress.

Joel [55:26]: "Freedom is the best thing that money can buy because it means you get to call the shots more and more about how you spend your time."

Matt [51:16]: "Breaking it down into manageable stages makes financial independence more attainable and less demoralizing."

---

Conclusion

In this episode, Joel and Matt effectively dismantle the notion of financial independence as a singular, distant milestone. By presenting FI as a multi-stage spectrum, they offer a more inclusive and achievable roadmap for listeners. This approach not only makes the pursuit of financial freedom less daunting but also allows individuals to enjoy incremental benefits along their journey, fostering a healthier and more balanced relationship with money.

---

Notable Quotes

• Joel [07:00]: "Financial independence exists on a spectrum. It is not an all or nothing thing."
• Matt [07:00]: "Financial independence exists on more of a spectrum."
• Joel [22:12]: "This is where everyone starts... Unless maybe like, you're a trust fund baby."
• Matt [24:09]: "This is when you still don't have much credit card fi, but you've amassed enough to give yourself some basic breathing room."
• Joel [43:08]: "The right way to think about the saving versus investing conundrum is to take the both and approach."
• Matt [43:15]: "It's like the Muhammad Ali approach: do it just like Muhammad Ali."
• Joel [55:26]: "Freedom is the best thing that money can buy because it means you get to call the shots more and more about how you spend your time."

---

Additional Resources

For a detailed breakdown of the financial independence spectrum discussed in this episode, visit howtomoney.com. The show notes also include links to resources like Monarch Money and credit card tools to aid your financial journey.

---

This episode serves as an essential guide for anyone looking to navigate the complexities of financial independence, providing both strategic insights and motivational encouragement to embrace a balanced and progressive approach to managing finances.

Transcript

[Matt]

This is an iHeart podcast.

[Joel]

Where do you see your career in 10 years? What are you doing now to help you get there? The sooner you start enhancing your skills, the sooner you'll be ready. That's why AARP has reskilling courses in a variety of categories like marketing and management, to help your income live as long as you do. That's right.

[Matt]

AARP has a bevy of free skill building courses for you to choose from. Because the steps that you choose to take today will help you to love what you do in the future. And that's why the younger you are, the more you need AARP. Learn more at aarp.org skills hey, it's.

[Joel]

Joel and Matt from how to Money. Matt, you and I, we do a decent amount of traveling. So what's a place that you think lived up to the hype?

[Matt]

That one is tough, but immediately what comes to mind is Scotland. The scenery in particular was insane. I'm specifically thinking about when we went and hiked Old Man's Store.

[Joel]

Oh, yeah.

[Matt]

Felt like we were on a completely different planet. It was otherworldly.

[Joel]

Sure was. Yeah. Yeah. And our Airbnb on the Isle of Skye, man, it looked straight out this field into the sea. Total tranquility. And the castle gardens that we saw, man, it felt straight out of a fairy tale.

[Matt]

It's true. Yeah. That trip showed us how big a difference the right place makes. And if you've got travel plans, don't let your place sit empty. Airbnb's co host feature makes it easy to earn a little cash or while someone else manages the day to day.

[Joel]

That's right, find a co [e-mail] host.

[Matt]

Run a business and not thinking about podcasting.

[Joel]

Think again.

[Matt]

More Americans listen to podcasts than ad.

[Joel]

Supported streaming music from Spotify and Pandora.

[Matt]

And as the number one podcaster, iHeart's twice as large as the next two combined.

[Joel]

Learn how podcasting can help your business. Call 844-844-IHeart. Welcome to how to Money. I'm Joel.

[Matt]

And I am Matt.

[Joel]

And today we're declaring that financial independence exists on a spectrum.

[Matt]

Yeah, I like that you said declaring because it makes me think of the Declaration of Independence as well and what.

[Joel]

It was supposed to make you think of.

[Matt]

Of course, this is the 4th of July week. Happy belated.

[Joel]

4Th of July.

[Matt]

4Th of July was yesterday. Hopefully you were able to take some time off. Hope you were celebrate the fact that we no longer have to pay taxes without representation. Instead, we pay taxes with representation. But. But yes, I Hope everyone wore like.

[Joel]

Some swimwear that had the United States flag on it, set off some fireworks, drank a really crummy beer. That's the only day that it's really acceptable.

[Matt]

But this also, anytime we get, we start getting close to the 4th of July towards Independence Day, it does make think about financial independence. And today we're going to talk about some of the, I think some different levels of financial independence that we think are going to be helpful. We're not talking about like barista fire, that kind of thing, but some more practical levels of fi that we think are going to be incredibly helpful as you are on your path towards some sense of financial freedom.

[Joel]

Yeah. Like the stepping stones along the way. And when you can identify those stepping stones, it makes a big difference in how you perceive moving along that path. And not only that, not only in like the psychological realm, but it makes a difference in the actions you can take along the way too.

[Matt]

Totally. Yeah. Should we have called it the stepping stones of financial independence? Maybe a little more tame, but okay. So last week we had an ask how to money question that we answered and a listener was asking about how he could negotiate some medical bills. And we specifically mentioned Healthcare Blue Book, how it's the site that you can go check out, compare the prices of some different procedures. Well, listener Kayla, she actually talked about how she was able to use this other website. It's called mdsave.

[Joel]

Yeah, she sent us an email, by the way. And anytime you've got crackerjack information on the personal finance front, shoot us an [e-mail] a.

[Matt]

We just love knowing what's out there, but mostly because. So that we can turn around and share with you all of our listeners out there. Yeah, but she said she was able to pay three times less for an MRI than basically what the average rate of that procedure was was going to cost there where she lives.

[Joel]

It's amazing.

[Matt]

A massive win.

[Joel]

It's hard, but not impossible to comparison shop healthcare procedures. And so I love that another website is out there trying to make this opaque area a little bit easier. So big props, big thanks to listener Kayla for mentioning this and hopefully everybody else can find mdsave.com a helpful resource. We'll link to it in our show notes for this episode. But it's one of those things where I wish it were simpler. I wish it was like Google Shopper kind of thing for healthcare, but they kind of MD save is kind of like.

[Matt]

They kind of make it like that. Exactly. So over time, as more Folks know about it. Like that's what makes Google shop or Amazon so ubiquitous is the fact that so many people use it. And it's just the fact that not a lot of people know about some of these different websites. So again, mdsave.com healthcare blue book, check them out. Especially if you have a non life threatening emergency, a procedure that you have to, that you have to get done. But Joel, let's introduce our beer.

[Joel]

Call 911 or go directly to the hospital if you, you know something life threatening is happening.

[Matt]

Yeah, you don't want to be cheap.

[Joel]

Right. But if it's one of those things where like I got to do this sometime in the next three, six months, then you have time to shop.

[Matt]

You got time to be frugal. Our beer, this episode is by Big Ditch Brewing Company and it's called Hayburner. It is an American ipa. Looking forward to sharing this one.

[Joel]

Yeah, listeners, Liz and Tyler actually sent this one our way.

[Matt]

That's right.

[Joel]

They're Buffalo Bills fans, apparently. So I don't really care much about the NFL these days, but I hear the Bills are good. So are they. I'm happy for Liz and Tyler.

[Matt]

Good for them.

[Joel]

And maybe I'll root for them because the Falcons are always bad. But let's, let's move on mat now let's get to the subject at hand. We're talking about financial independence and how it exists on a spectrum, the stepping stones really of financial independence. And it makes me think, speaking of sports, talking about football, this topic made me think about the home run obsession of 1998 that took over the whole country. You were alive then. We were like 14 years old.

[Matt]

I remember that.

[Joel]

Well, no, you were older than that. You were probably 16.

[Matt]

I was 1498. Yep.

[Joel]

Yeah, well, but Sammy Sosa and Mark McGwire, those are the two eyeballs on those two guys more than anybody else. And granted, yes, it was all fueled by steroids and corked bats and stuff like that, but home runs, well, we.

[Matt]

Didn'T know it at the time. You're like ruining all the fun.

[Joel]

So we all thought it was great and it was good, wholesome fun when really not quite. But yeah, home runs kind of became the only meaningful metric in the sport of baseball, which in my mind actually made it a whole lot more boring. A lot of people were super into it. I thought the opposite was true because doubles, stolen bases, shoestring catches. That to me is the fun stuff about baseball. The 450 foot bomb, though, especially when it's done on repeat. It gets boring after a while.

[Matt]

I get that.

[Joel]

It's, you know, it's like, okay, may.

[Matt]

As well sit there and watch the Daytona 500. Speaking of Americans.

[Joel]

Yeah.

[Matt]

The same thing happening over and over.

[Joel]

That's why Formula one is more interesting than nascar. I agree. Don't shoot the messenger, but the home run really is an all or nothing approach. And some folks, they take that same approach to financial independence. They come up with a fine number. Right. An amount they need to save up in order to bag work completely. But the truth is financial independence exists on more of a spectrum. It is not an all or nothing thing. And we believe that thinking about it in that way is going to help you from a mental and from a financial perspective.

[Matt]

Totally. Yeah. Plus, nothing is more American than talking about baseball. Forget the Formula one comment, everybody out there. So, Joel, good example here with the baseball analogy. And actually we just went to our first Braves game of the year the other night. We had a great time.

[Joel]

Speaking of home runs, Braves been hitting a lot of home runs lately.

[Matt]

Yeah, they hit an insane number of them last month. Right. But go big or go home, like, it's got a certain ring to it, right? Like it's got a. It's a nice rallying cry, but it's also not really all that practical. And one of the problems with that go big or go home approach is that it can make. When it comes to money, and we're talking about financial independence here, is that it can make financial independence seem unattainable, that it is just out of reach of the typical American. It's all or nothing. And because of that, you're going to have to put your nose to the grindstone for a long stinking time before you can accomplish that goal. Or if something like the. Another problem too, is like, if something is unattainable and you just feel or believe that you can't do it, what do you do? Typically, you give up.

[Joel]

Right.

[Matt]

It's kind of the other side of the coin here, but it can be, I think, just as disheartening. But what if you thought about financial independence as a spectrum instead? Something that you are gradually achieving more of. We think that that is a healthier approach that is also going to accelerate your progress.

[Joel]

Yes. And I think it deserves a brief mention here. Real quick, Matt, that money is not the only kind of wealth. That is. This is money. We talk about money a lot, but.

[Matt]

This is like the disclaimer before we launch into credit card benefits or credit card rewards.

[Joel]

Exactly. Yeah. And obviously that's what we focus on on the show. But wealth is really, I guess if you're going to give it. It's. It's the. The most basic definition would be something like an abundance of resources. And that doesn't specifically have to mean US Dollars. Right. I mean, it can mean a whole lot of things. And even though we want how to money listeners to become wealthy from a money perspective, building up savings and investments, we also want you to enjoy wealth and abundance in all those sectors of. And so the truth is focusing intently on money as the only source of wealth that you care about, that will likely prevent you from attaining wealth in other important areas. So there's this recent Schwab survey, Matt, about how people perceive wealth. And they found that wealth looks a lot more like not having to stress over money than having a lot of money, which I think speaks exactly to what we're talking about here. A Scrooge McDuck esque, like amount of money so that you can swim in. It is not really what people are after. Most people are after not stressing about money. And that is the cool, I think about this spectrum is that it de. Stresses you and how you relate to your finances more and more over time. And so that's a better way of thinking about growing your wealth than amassing the biggest number possible.

[Matt]

Totally, yeah. And even outside of the arena of money, though, like, there are other aspects of life that we think that are important to focus on. Like recently, I think we've talked about the different arenas of life. And actually, even more recently, I come across this framework or this approach to life. It's called the spire approach. Have you ever heard of that?

[Joel]

Oh, I have, yeah. Yeah.

[Matt]

It stands for. And it's again, it kind of divides your life into different sectors. What everybody talks about, like the spiritual, the physical, the intellectual relationships, emotional. We want to find health in all of these areas in life. And what. And this was based on research done somewhat recently. But what was interesting about it is that there are lots of different folks who have thought hard and done research into this, and they all kind of come back to these same things. And so it's not like this some new fad or something like that. This is something that rings true, I think, for all of us. And what was really interesting though, is that money was very much absent from that lineup. And so does that mean we're gonna stop talking about money here on the show? No, of course not. Because obviously being financially secure allows you to achieve health in a lot of these different areas in life. It's a tool, but oftentimes it can become the focus. You know, it's the tool that we think is the end all, be all, as opposed to a means to an end. And so it's worth pointing out that though overall on the show here at how to Money, we talk about personal finances, ultimately what we are pushing you to do is to focus on some of these other areas in life that ring true to you because they're going to be more that are more important to you than the next guy.

[Joel]

And that's where the stepping stone approach makes a whole lot of sense. Because instead of viewing it as I got to amass $1.7 million to actually be financially independent, your focus then is probably too much on money, money, money. And if you can see it on the stepping stone, oh, I just made more progress. Oh, I got a little more further this direction. I'm achieving more financial independence. It can allow you to be less focused on money overall, which I think is a good thing.

[Matt]

It's not just, and it shouldn't be that you're just working your butt off until you can finally retire. Right. Potentially, when you're far less able to actually enjoy the fruits of your labor. Because there are other aspects of health that you have neglected specifically. I'm referring to physical health.

[Joel]

In this case, you're nose at the grindstone, working 60 hours a week. You're missing out on the relational and then the relationship.

[Matt]

Yeah, exactly. Yeah. You're all of those areas of life within that spire framework can suffer if you are overly focused on your net worth.

[Joel]

You might have more money, but you're probably less happy, less successful.

[Matt]

Yeah. And you are really, from an overall perspective, you're richer financially, but you're poor in all of the other areas that matter much more. And the truth is, when it comes to viewing money or financial independence specifically on a spectrum, your options, they grow with each step that you take, with every additional dollar that you are able to bank.

[Joel]

Well, it's also important to mention the goal of financial independence to isn't just to be able to consume more than you can now. I think some people think that more money means who I'm just delaying consumption and stuff. Go hog wild, right? Yeah. And it's not about being able to afford more filet mignon instead of just the plain old cheap chicken thighs or something like that.

[Matt]

Don't you knock chicken thighs?

[Joel]

They're great.

[Matt]

Makes the best fried chicken.

[Joel]

I know. They're actually cheap but tasty. But even as your level of financial independence grows, it is nice to have more choice from a consumer standpoint, I'll admit to that. But the true goal of having more money in the bank is more about being able to choose the life you want, choosing the life you want to live, what you do with your time. And thinking about financial independence on this spectrum that we're going to kind of lay out here, it makes it easier to adjust your goals as your life changes too. For instance, like having kids, it might mean you want to work less. And if you have gotten a couple more steps down the road on that path to financial independence, you can make that choice. And that is something you can do in your 30s, as opposed to saying, thinking of financial independence just as this long distance destination that you're working towards. Makes me think Matt of that old parable of the fisherman, right? And, oh yes, he's enjoying fishing all day, sells a few of the fish, cracks a beer open with his buddies, and someone comes along and says, you could start a business out of this if we.

[Matt]

These fish that you catch are phenomenal.

[Joel]

Yeah, exactly.

[Matt]

You got to expand.

[Joel]

Yeah. And then he's like, ultimately the goal is to get back to the exact life he's living now, right? Which is, which is fishing for a few hours, selling the fish, having beers with his friends, enjoying his community and his family. And so I think that can put it in perspective too. I think that parable is really indicative of what a lot of people are after. They're working their butt off and they're wasting actually some of these precious years. They're working too hard for money in hopes that they can have some sort of leisurely retirement as opposed to incorporating some of that leisure, some of that joy now.

[Matt]

Exactly. Yeah. So let's talk about the nuts and bolts here for a second, because the way it works, you move up the financial independence spectrum by doing a few different things simultaneously. It takes paying down debt, it takes saving your money, and then beyond that, it takes investing your money. And if you're plugging away at all three things simultaneously, which most of us are, well, you're going to be increasing your net worth, you're going to be increasing your liquidity over time, and you're eliminating more of these ongoing monthly obligations. But clearly your money metrics are improving over the months and over the years of doing the right thing. And that should mean that you get to experience higher levels of freedom and autonomy along the way. It shouldn't just be reserved for quitting work altogether and waiting and only realizing that the, at the end of the Road that there's some sort of prize, some sort of medal that you're going to be able to attain.

[Joel]

Yeah. There is no metal for financial life.

[Matt]

No.

[Joel]

From what I've seen, I haven't seen anyone get a medal. If I do, I'll let you know. But there's no trophies or anything like that. And so really it is all about your mindset and your approach. And I think, unfortunately, Matt, most people, when they think about financial independence, they associate it with a go big or go home mindset. They associate it with that all or nothing mentality, the home run or nothing. Right. Or strikeout, which is what actually makes baseball more boring these days. Although it is quicker. The games were quicker. Like the one we went to two and a half hours. That was nice.

[Matt]

Just because of that pitch clock, man.

[Joel]

I know. I think the thing is it's not that crushing a homer isn't a bad thing. Right. And makes me think of this old Braves player, Rafael Belliard. I think he, he played for like 16 years and he literally hit two home runs in his entire career. I'm sure he's glad that he hit a couple homers and like, didn't never hit one. Right. The entire time he was in the league, dude, he was like so small and he choked up on the bat and so he was like a slap single kind of hitter. But he was quick and he was good on defense. So it's not that we're, we're against your ability to make big strides. Right? Sure. And I think getting to the point where you can actually quit work altogether and completely living off your nest egg, that's worth striving for. That is part of the spectrum that.

[Matt]

Is the home run.

[Joel]

Yeah. But usually you're going to get there through a, you're going to round the bases through a single, a stolen base and then the RBI hit to get you in. Right. So it's going to.

[Matt]

And that's what most guys do.

[Joel]

Like, that's what they call that manufacturing runs.

[Matt]

Yeah, that's. That's like the majority of baseball is that. And like we were lucky enough to see a couple of homers the other night as well. And it is a ton of fun.

[Joel]

You just want, you just want a little bit of everything.

[Matt]

Yeah, it's, it's a, it's a ton of fun. But at the same time, if that is all that you were going for, it would make for honestly just a boring sport to watch.

[Joel]

Yes, it would. Yeah. We think if that's the only thing you're focused on the home run or the ultimate number, you're missing out on a whole lot in between. That's why we think it is worth laying out all of these different stages along the way on your on your way to ultimate financial independence. We will delineate, we will lay out that spectrum and how that should impact your savings and investing habits. And we'll get to all that right after this.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriends the first step in solving any problem that we have in life. Whether we're talking about a conflict in a relationship, why the check engine light is on right, flashing on the car, or even why we can't seem to set aside enough money for different goals we have. The first step is to clearly define the problem. We've got to assess the situation, what's going on with your spending, and that is where Monarch money comes in. But Monarch is more than just a budgeting app. It works as your own personal cfo, giving you full visibility and control over all your accounts, investments and financial goals.

[Joel]

Monarch is truly a game changer and I love how you can choose goals that you want to hit and then you can rank them in order of priority. It's pretty rad. It makes those goals a lot more concrete and tangible. My top goal has been funding our family summer travels.

[Matt]

Nice.

[Joel]

So start managing your finances to build the life you actually want. The truth is, without a clear financial picture, your financial dreams really can feel out of reach. And Monarch makes managing money simple, even for busy lives.

[Matt]

That's right, man. Get control of your overall Finances with Monarch Money. Use code [e-mail] in your browser for half off your first year. That's 50% off your first year at monarchmoney.com with code howtomoney.

[Joel]

Looking for a smarter way to teach your child to ride a bike and support American jobs at the same time? Most kids bikes are just cheap imports. They're heavy, clunky, hard for kids to control. Guardian Bikes is changing that. They're assembling bikes right here in the USA with plans for full US manufacturing in the next few months. It's a commitment to higher quality and American craftsmanship you can trust. Each bike is lightweight, low to the ground and built to help kids learn to ride faster, many in just one day. No training wheels needed.

[Matt]

And here is the real game changer. Guardian's patented SureStop braking system. One lever. It stops both wheels, giving your child more control. Faster stops and it prevents those scary head over the handlebar accidents. It's so easy that even a two year old can do it. And so if you are ready to support American jobs and keep your kids Safe, head to guardianbikes.com today. You'll save hundreds of dollars compared to the competition. And when you join their newsletter, you'll get a free bike lock and pump, which is a $50 value.

[Joel]

That's guardianbikes.com built in the USA, made specifically for kids. Guardianbikes.com.

[Matt]

All right, we are back and we're probably done with all of the baseball analysis. Actually we're prob will probably refer to it again.

[Joel]

There are probably people out there listening and they're like I could care less.

[Matt]

They're like, I thought Magell were like soccer guys. Hey, we are still soccer guys. But we just. It was fun to go to a base. I had like that was literally my first game that I had been to at the at Truest park.

[Joel]

Oh, I didn't know that was your first.

[Matt]

Yes, I've been outside it before. Like Kate and I, the battery, there's like restaurants and stuff. So we've done date nights there before, but we have never. I've never actually been to a game there and I almost said match. Never a match there.

[Joel]

Yeah.

[Matt]

But let's go ahead now discuss some of these different levels of financial independence. The ones that we think are important to identify.

[Joel]

And by the way, these are proprietary terms we've come up with. Oh yeah, nobody influenced us. We came up with our own.

[Matt]

We came up with these.

[Joel]

This is the spectrum. The how do money guys have outlined that's right.

[Matt]

And at the very bottom of the spectrum is what we're going to call no fi. This means that you're likely living paycheck to paycheck. You have literally zero financial freedom and you are completely dependent on your job, your job, the whims of your employer. And this is actually a big chunk of Americans, as we all know too well. This is the 40 plus percent of folks who can't afford a $400 unexpected expense.

[Joel]

We see that number come out every year. It gets updated, and it's always right in that vicinity.

[Matt]

And here's the thing, though, like, this is where everyone starts. Unless maybe like, you're a trust fund baby. Trust fund baby, if you were born with a silver spoon in your mouth. But given, honestly, like, given the cold reality of student loan debt in our country, a giant swath of young folks out there are starting out just, just in a bigger hole than just nofi. Right? It's not that they're starting at zero. They're actually starting off with that negative net worth. But when you are nofi, well, you don't have any options available to you because you gotta keep working for that next paycheck. No work means no money. You don't have the options, and you literally have no financial independence.

[Joel]

And again, you said this is where people start. There's nothing wrong with that. There's no shame in that game. This is the reality for most people as they're beginning out.

[Matt]

No shame.

[Joel]

I wish I look back to my early years. I'm like, I was nofi for a while, man.

[Matt]

We, maybe we should come up with like, beyond that, like negative I or something like, because that's technically folks who are coming with loans. Yes, if only. I think a lot of folks are probably thinking that if only I could have graduated and had a net worth of zero, but in fact, I had a negative net worth of $26,000 or 46, whatever it is.

[Joel]

So we get it. Just trying to get back to zero.

[Matt]

Is that in and of itself a difficult thing?

[Joel]

And that is part of the stepping stone is saying, like, listen, I got to get beyond. I got to get beyond here. And so the next step, the next place you're going to want to venture on your FI spectrum journey is you want to get the credit card fi. That's what we're calling it. Because really, how long you end up hanging out at each of these stages of financial independence is kind of up to you. It's up to your actions. It's up to how quickly you're able to pay off debt to save more. It's up to how quickly you're able to increase your income. Right. And so do you fall into a rut of living paycheck to paycheck, staying there for longer than you otherwise should, or. Or are you immediately trying to create some margin in order to advance to the next stage of financial independence, which is this credit card fi, Right?

[Matt]

That's right. That's how you get from no fi to credit card front.

[Joel]

Yes. You got.

[Matt]

Dang it, I said fry fi.

[Joel]

Yeah. It involves habits, right. And it involves making changes, little tweaks to each one of these. Each one of these things. And so this is when you still don't have much credit card fi, but you've amassed enough to give yourself some basic breathing room. And most importantly, you're no longer dependent on your credit cards when unexpected expenses, expenses crop up. And there's a reason, Matt, that our first money gear is to have a basic emergency fund set aside where you have $2,467 in the bank at your disposal. And you know, we're all for using credit cards wisely, you and me. That's what we recommend. But we don't want them to become a crutch, something you have to rely on when a few unexpected expenses pop up in your life.

[Matt]

That's right. Yeah. And once you've got that basic emergency fund on hand, and it's going to feel like you're finally able to take a time out where you can get a sip of water and a quick rest after having run the basketball court for most of the first half.

[Joel]

More sports references.

[Matt]

We're switching it up. It's not ideal. Right. Like, you still want to have maybe a longer rest at halftime, but at least it's something that's where the stage of financial independence gets you. It's a fairly low bar, but considering where so many Americans are with their finances, it's what a lot of folks need to be aiming for. Right? Like just getting to this point, it can relieve a lot of stress. And we're not just talking about folks who are making minimum wage. We're talking about high wage earners as well. I think, like the. It's a majority of folks who make more than $100,000 are living paycheck to paycheck. It's like 51% or something like that. And so we're not just picking on folks who are maybe either just starting out in their career or folks who have a job where, hey, man, I'm Just not going to make a ton of money here. No, no, we're talking to folks who make good money. But even still, they are making the same mistakes with their, with their finances.

[Joel]

Yeah, they're outspending their paycheck. Even though that paycheck is relatively large. The next step along the way is achieving what we call layoff I and this is the next level to shoot for on the how to money financial independence spectrum because it's when you not only have that base amount of $2,467 saved up, it's when you have a fully funded emergency fund. And so, yeah, this is basically when you have three to six months worth of expenses on hand in that savings account. Whether you should have the leaner three months or the fatter six months, that really depends on a number of things. One of which is do you live in a two income household or not? I think if that's the case, yeah, you can have a little bit less socked away in savings if you have.

[Matt]

Do you have tenure at the university where you teach? Maybe you'll be okay.

[Joel]

It's like, no, I could literally punch the dean in the face and I would still retain my job. Might not need to have quite as much on hand.

[Matt]

It depends on your risk tolerance. Right. Like how comfortable you are with your income dropping or if you are willing or capable honestly of cutting back on your within your expenses were you to earn less money. And that there's so many different things you have to take into account because that is something that you may have been more willing to do or more capable of doing back before you had kids, but now you have kids and man, there are certain expenses that are, are necessary for me to go work. Like childcare. That's something we gotta pay for or. Yeah, all important things to keep in mind.

[Joel]

Exactly. And I think that's a great point. And we're calling this layoff fi because that bare bones E fund, that's not.

[Matt]

Gonna get you very far if you lose your job.

[Joel]

Right. But beyond that initial savings threshold that we want you to achieve, having layoff fi money on hand in your bank account, that'll smooth out some of those bigger bumps in life like getting fired. Right. If you do punch someone in the face at your job or hopefully just laid off, hopefully there's no violence involved.

[Matt]

We're also not advocating for violence.

[Joel]

Don't punch anybod. Don't do that.

[Matt]

But unless you are Elon Musk or Zuckerberg, we haven't talked about that here on the show yet. But if and when that does happen, we're there for it. I'll be watching the most unentertaining actual.

[Joel]

Fight, but the, the best buildup in human history.

[Matt]

100% right.

[Joel]

Well, I mean this is. Yeah, hopefully you're not getting fired, you're just getting laid off. And even then, we obviously don't want that. But you want to be prepared for the potential of a layoff because they happen. Right. An unexpected layoff is one of those things that can set you back in your financial progress meaningfully. And a few months of not being at a job can make it can make it feel like it sets you back years in your finances. By the way, Matt, I know this from personal experience, not from my own layoff, but from my dad being laid off when we were kids. That was a tough thing to come back from. And it really, really can, it can derail a career. And so you just. Having that layoff find money doesn't make it easy to get that news, but it does make it less financially obtrusive. And so if you haven't socked away a bit, big savings, nest egg, it's. It's a precarious feeling to get laid off. That's what we want people to have is like more money on hand to then be able to endure the bigger road bumps that life throws at you.

[Matt]

Yeah, it doesn't feel good living on the edge like that. And largely because those bigger, those more jarring events like a layoff would throw you into an adverse financial state pretty quickly. But having this much on hand, it also ensures that you can take a little more time before you have to commit to a new job. And so whether that means just maybe getting a little bit of rest, you know, taking a couple weeks off, or just allowing you to turn down a job, that's not necessarily ideal because you have some savings to back you up. You know, you've got that fully funded emergency fund of three to six months of living expenses set aside. Having achieved layoff, I. This is a clutch stage as you are ratcheting as you're moving along that financial independence spectrum.

[Joel]

Yeah, I had a friend who lost his job a couple years ago and I just remember being so bummed that he didn't have have like layoff by status because it was. He had to take the first job that came along and it paid less than the one he had just lost. And that's a tough spot to be in. If you have extra months worth of expenses, you can be a little pickier and I think that can. That can ultimately help you rebound and ensure that your career stays intact. And the financial independence and where you're at on your journey to financial independence makes a big difference in the choices you. You can make or that you're forced to make in the moment.

[Matt]

Absolutely.

[Joel]

All right, next on the spectrum is peace outfi. That's what we're calling it. We've talked about peace out money before. That's. Some people call it FU money, but we're more tactful than those people, Matt. And so, yeah, I think this is really when someone has saved beyond six months of living expenses. So maybe that is lay out fi is up to six months, and then beyond that is like, okay, you're peace out Fi. And instead of just being prepared for a layer layoff, now you can even engineer your own layoff if that's what you want to do. And still best to give two weeks of notice. You don't want to intentionally burn bridges. And that's why we don't call it FU money, because peace out money just sounds like you're doing it in a peaceful, joyous way, as opposed to throwing a Molotov cocktail through the door, sticking.

[Matt]

It to the man as you leave.

[Joel]

Right? Yeah. And so, yeah, you can, though. And you should feel the freedom to step away from a job for things like health reasons or to take care of an ailing parent or a spouse. Rather than taking a more passive role in your employment and hoping that you're not next on the chopping block, you're actively steering the car of your own life towards what others might see as a financial cliff. But they don't know that you've achieved peace out fi. They don't know that you've got the financial wherewithal and the dollars in the bank account to back you up. That's right. Even if you're like, you know, it makes me think of even being able to negotiate your own layoff, Matt. We talked about that with Sam Dogan, the financial samurai at one point. And if you've got got cash in the bank and you see writing on the wall, things aren't good at your employer. Hey, you know what? You can volunteer as tribute. Negotiate a pretty sweet severance package. And that combined with the amount of money you've been able to save you, you can peace out for a while.

[Matt]

Yeah. That gives you even more Runway to make the decisions that you think are going to be best not only for you and your life, but for your family and ultimately. Well, yeah, I should have said Ultimately your family, but I was gonna say your career as well and kind of what direction you want to go in. But this, this level of financial independence, this level of fi, it also comes with more power to push back and, you know, going back to avoiding the all or nothing mindset. You also don't have to completely quit when something is going on at work, when something happens that you're not a fan of. But you can. If you just can't stomach your boss or if you can't handle the insufferable.

[Joel]

Hours anymore, it's like office space I'm gonna need you to come in on. It's like, if you don't bother coming on Saturday, don't come in on Sunday. And that's at that point when you're peaceful, you can be like, okay, now it's too much. I'm gone. You really can at that point.

[Matt]

Yeah. But what we're talking about here though, is just the ability, like the confidence that you might have to start having some conversations. Because this level of financial freedom can just help you to negotiate for the things that you really want. And it's going to be easier to negotiate successfully when you really can walk away. If in case they call your bluff and they're like, no, I'm sorry, that's not going to work. And you can say, all right, well then this isn't going to work out for me anymore.

[Joel]

You can kind of really exhibit that, Peter, in office space. Degree of apathy, you know that cool, calm, collected. Okay, cool. Let it roll off your back like a duck. When you, when you're peace out phi, you really can just be like, okay, that's great, no worries. But this doesn't work for me. Now.

[Matt]

You don't have to smash up any equipment either, but you have the ability, like you said to.

[Joel]

We're getting fire in this one again too. Sorry about that.

[Matt]

The whole office space thing. Let's talk about the next stage of phi, which is sabbatical phi. It's sort of like a peace out Phi, but on steroids. So this means you can take an extended absence from work and be just fine. It means that if you quit, you're not immediately looking for a new gig like you would with PSOP Fi. Typically, with PSOP Fi, you are peacefully walking away from that job. You're saying psal, but typically it means you're like, all right, maybe I'll sit low, kind of chill out for a little bit, but I'm going to start looking for my next job. Not so with Sabbatical phi, you're actually able to enjoy a lengthy period of rest, and you might even have enough on hand to completely change what it is that your life and your career looks like. So, like, we're not really talking about, like, a simple extended vacation that your employer might offer. You know, like, they might call taking four weeks off a sabbatical. And that's not really the definition that we're going after here. Like, what's. What's at the heart of what we're calling sabbatical fi is the ability almost to reinvent yourself yourself. This is when you have the freedom to change course in your career. Like, it's when you can fulfill a desire to go back to school and to learn something new. It's. It's when you have the confidence to start a new business. These are all bigger things than just being able to say, peace out, I'm going to go find another job. Sabbatical fi is like, who am I? It's that sitting on the curb moment, and you're asking God what it is that you should do next.

[Joel]

Well, yeah. And yeah, four weeks. What a pitiful sabbatical. Like, people. That's really. Eight weeks is like the minimum a sabbatical should be, in my opinion. But, yeah, I was glad.

[Matt]

I don't know how I came across this website. I think it's called Sabbatical Guide and popped up when I was researching sabbatical. And evidently, according to folks who are there on his website that interact and stuff, the average length of time for sabbatical was eight months.

[Joel]

Okay. Wow.

[Matt]

Which I was really happy to see.

[Joel]

It's very impressive.

[Matt]

At least the folks who are looking, trying to find sabbatical guidance, that's what. That's average for them. So I was happy to. And that's. I guess what we're speaking to is the fact that. That there is a way this isn't just taking a long leave of absence from your work, but sort of like, what's the next stage of my career? Like, what times did I want to.

[Joel]

Do that happens for people because they're burned out. And this should not. This should be more proactive. Right. It should be more like, I'm choosing this as opposed to I can't take it anymore. Right.

[Matt]

And it doesn't necessarily have to be exclusive, you know, like, because you might find yourself in that situation as well. All different flavors.

[Joel]

Sure. Well. And okay. So the Sabbatical five makes me think of our friend Chad Carson, front of the show. We've had him on before we're going to have him on again actually soon because he's written a new book about real estate and he's done multiple year long stints, sabbaticals, essentially with his family. He's still working a little, doing his. His small business thing, which he can do from anywhere in the world that he wants. And I think that sort of choice, it sounds impossible for most folks, but if you have handled your finances well, if you've kept your expenses low, if you've been, you know, saving at a high clip and you've got got enough cash or passive income, in the case of Chad, who's invested in real estate, you can really make this a reality. He takes the opportunity to go to a different country when he does this. The first time he did it, it was South America. This time around, it was a year in Spain. And so it creates a cultural experience for his kids and for him too, like living in a walkable city that he never, you know, he might have got to visit for a couple weeks, but he got a whole year there, man. He got to develop a community. I can't wait to talk to him about it. I know. I'm so excited to just really hear about all the details. But this is the kind of thing where sabbatical fi can really, if you, if you hit this point, it gives you the option to do something crazy that most of your friends would be like, how in the world are you even able to do that? And so much of it becomes possible, from one a mindset change to thinking, oh, I can get there. But also through handling your finances in such a way that you have enough money to really make this possible without freaking out. Right?

[Matt]

That's right.

[Joel]

But okay, this brings up the question, Matt, of saving versus investing, because we've talked a lot about cash in the bank, and that is certainly part of it. Some of it has to be liquid, but in order to grow your wealth for ultimate financial independence, you got to invest it, too. So we're going to talk about the dichotomy of that and explain our last steps and really how to think about financial independence. We'll get to all that right after this.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years, more specifically your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about. Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come, but none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend looking for.

[Joel]

A smarter way to teach your child to ride a bike and support American jobs at the same time? Most kids bikes are just cheap imports. They're heavy, clunky, hard for kids to control. Guardian Bikes is changing that. They're assembling bikes right here in the USA with plans for full US Manufacturing in the next few months. It's a commitment to higher quality and American craftsmanship you can trust. Each bike is lightweight, low to the ground and built to help kids learn to ride faster, many in just one day. No training wheels needed.

[Matt]

And here is the real game changer. Guardian's patented SureStop braking system. One lever, it stops both wheels, giving your child more control, faster stops and it prevents those scary head over the handlebar accidents. It's so easy that even a two year old can do it. And so if you are ready to support American jobs and keep your kids Safe, head to guardianbikes.com today. You'll save hundreds of dollars compared to the competition and when you join their newsletter you'll get a free bike lock and pump which is a $50 value.

[Joel]

That's guardianbikes.com built in the USA made specifically for kids. Guardianbikes.com this episode is brought to you.

[Matt]

By Navy Federal Credit Union. Navy Federal can help you find and finance the right vehicle with ease. Assuming you hadn't saved up the cash and this summer you are in the driver's seat with savings. You could get a $250 bonus when you buy your next car through Navy Federal's car buying service. Powered by TrueCar and finance with Navy Federal.

[Joel]

With this tool you can find the vehicle that's right for you as you search through inventory and compare models. And you can get an amazing rate when you finance with Navy Federal. Navy Federal strives to support all active duty veterans and their families to achieve their personal and financial goals. Goals and this partnership with TrueCar is one of many tools Navy Federal uses to help its members.

[Matt]

That's right. Make your plan with Navy Federal and TrueCar today. To qualify for the $250 bonus, car purchase and financing must be completed by September 2, 2025. Terms and conditions apply and are available at navyfederal.org TrueCar Credit and Collateral subject to approval. Navy Federal is insured by ncua. All right, let's continue our journey along the spectrum of financial independence. And you kind of, you know, you mentioned this right before the break, but like all of the levels that we've talked about up until now, all the different levels of fi, they basically require having cash in the bank. Like you need to be able to tap those reserves basically if something happens. Because honestly, a lot of the things that we discussed, you are reacting to something, right? Like whether it's an emergency that pops up, whether it is, oh man, conditions at work just got pretty terrible. Like, I think maybe the sabbatical FI is one of the ones that you can plan for maybe a little bit further in advance.

[Joel]

Makes me think about my last job. Some sort of ruthless private equity firm bought out the radio station I worked for and it changed the entire dynamic of working there. And so people were like, if you had the financial ability, you might have been looking for something else, whereas you didn't, might have been stuck in place. And this is why too, you're right, what you're speaking to is 401k money doesn't help you nearly as much much in that situation as liquid cash.

[Matt]

So it's, I mean, There's a catch 22, right? Because you need to have that cash on hand in order to achieve some of these different levels of five that we've talked about. But if you aren't investing for the long haul, well, how are you going to actually retire? How are you going to be able to reach that ultimate level of financial independence? We're all about those tax advantaged retirement accounts, but you can't access those until you reach the, the ripe old age of 59 and a half. And so if you stock everything away into those accounts, despite your growing net worth, you are going to be less likely to feel like that you're moving along the financial independence spectrum because you are, it's almost a problem that these different financial products that they have created, right, because they are created in such a way that there is a finish line, there is this goal, this award that you receive, which is the quote, unquote, retirement that so many folks are used to.

[Joel]

The ability to draw down on those funds.

[Matt]

Exactly. And so there's the structure in place that encourages us to think about financial independence in this way. So honestly, it's no wonder that this is a. Something that we're talking about because we think it's important. But the reason we're talking about it is because we think it's a problem that the. That there are so many folks who think that the only way to consider themselves financially independent is if they have enough in the bank to actually retire.

[Joel]

Yeah. And that's why it takes more than just tax advantage retirement accounts to get you further along this 5 spectrum. And so I think really, really the right way to think about the saving versus investing conundrum in the financial independence spectrum is to take the both and approach.

[Matt]

It's to remove the dichotomy. It's not like whatever versus whatever it's like. And yes. It's more like improv.

[Joel]

Yeah, exactly. The yes and approach. Right.

[Matt]

As opposed to like it being this battle, sort of like not to veer off course. But it's how we talk about Roth versus traditional.

[Joel]

I thought you were going back to basically. No, no, no.

[Matt]

Going to boxing now.

[Joel]

Oh, great.

[Matt]

It's how we talk about Roth versus traditional accounts. It's like. Well, if you're at a certain point. Yes. Consider both. Because the ability to diversify your tax liability down the road, that's huge.

[Joel]

Yeah. And on the boxing note, float like a butterfly, sting like a bee. I think that's maybe the saving and investing, you need both. Right. That's the Muhammad Ali approach.

[Matt]

Do it just like Muhammad Ali.

[Joel]

But I think liquid savings makes matters. But don't shoot for 18 months worth of savings before you invest your first time. That would not be the approach we would advise.

[Matt]

That would be a touch nearsighted.

[Joel]

Yeah, exactly. We actually want you investing as soon as you hit credit card fi. Right. Which is early on in that financial independence spectrum. Once you've got a basic stash of $2,467, you do want to start funneling money towards investments. You do want to make sure you're at minimum getting the match on that 401k before you start saving more. Right. Because savings alone isn't going to get you to the ultimate stop on your destination. Right. You've got to experience compounding returns over a longer period of time if you want to achieve full financial independence, which is ultimately where we want you to end up. Even though you're hitting those sweet spots along the way and enjoying greater levels of Financial independence over the years.

[Matt]

That's right, man. Yeah. So the last stop on the financial independence spectrum is when you can achieve full and ultimate financial independence. We didn't really come up with a cute, like a short, cutesy, the full monty financial independence. Like, we didn't come up with anything like that. But if that is you, congrats. Because at this point, the world is your oyster. You never have to work again if you don't want to. Interestingly enough though, like most folks do, especially if they are still young, they do want to do some sort of work, but they just might want to do less of it and they might want to enjoy whatever it is that they do do a little bit more. They might want to have a little more flexibility to truly say, yeah, no, thank you, I'm going to work the hours I want to work. Does that work for you? If not, then I'm going to have to bounce.

[Joel]

Yeah.

[Matt]

And even once you've achieved this level, you might still want to find ways to grow your net worth because maybe you've got goals of generational wealth, maybe you want to be super philanthropic. These are all other things to keep in mind as well. It doesn't necessarily mean. It doesn't mean you have to retire and, you know, sip lemonade or sweet tea on the front porch.

[Joel]

Right.

[Matt]

While you watch all the youngins out there play.

[Joel]

It does sound nice though.

[Matt]

Yeah, it sounds alright.

[Joel]

At least occasionally. Right. I still want to be active and doing stuff, but I agree, yeah, financial independence, it means maybe at like 3.

[Matt]

O', clock, after you've worked a nice solid five hours, you know, like just there are. You can still work. You can still have your sweet tea in the rocking. Rocking chair on the porch.

[Joel]

Yeah.

[Matt]

Cracker barrel style. That's what you. If that's what you want, Joel.

[Joel]

I just want the giant checkers, man. That's what I want. Well, I think the point you're making here is that work still holds value even if you don't do it and you don't need it for the money. Because there are other goals you can have saving up more. And some of that might be just the impact that you're having based on the work that you're doing. Or you might want to do volunteer work instead. I mean, there's all sorts of options when you get to this point of like full and complete fi. Whatever we're calling it. We really should have come up with a better name on this one. But alas, we got lazy.

[Matt]

Fully fi.

[Joel]

That's what we'll call it fully fi.

[Matt]

Yeah, nothing wrong with that.

[Joel]

Okay, so let's talk about this as we're kind of like starting to round this episode out and finishing up here. I think it's important to mention that because financial independence is on a spectrum, we want you to find ways to exploit where you are on that road to financial independence, right? As you continue to gain and accrue more of it, start to ask questions like, what do you want your days to look like? Like, what do you want your weeks to look like? Because we would suggest that you really are able to morph and change your life more than you think along the way. This is the real power behind realizing that financial independence is a spectrum. Because you can take advantage of the progress you've made with each step that you take. The ultimate goal is not dying with millions in the bank. And in fact, I would suggest that is a rather pitiful goal to have. So don't be afraid to lean into your financial independence level and enjoy the benefits of it. It. If you continue to think of it as this all or nothing equation, you probably won't find and you won't be able to appreciate the progress that you're making along the way.

[Matt]

Yeah, maybe we should. It's not an on or off switch, it's a dimmer switch. Maybe we should call it financial independence is a dimmer switch. It's even more milquetoast than stepping stones.

[Joel]

Right?

[Matt]

But there's a fine line between lifestyle creep and what essentially what we're saying here, which is realizing your wealth, right? Because on one hand, and you are just being kind of carried away by the culture, the currents of culture, right? And maybe you start you're thinking about buying something like you're thinking about buying a new suv. Well, because that's what all the neighbors are doing. Or oh, maybe it's because I care about what it is that the other parents at carpool, what it is that they think. And so it's worth thinking through, like, why am I actually doing this? Like, should I care what it is that they think? Or maybe I should care about the things that are truly important to me. Like again, going back to that spire framework, how can I spend some of my wealth, how can I exercise some of my financial independence in a way that's going to lead to more health in those other areas in life. A very simple example could be getting your yard cut by like a lawn service or something, right? Like, you could do that maybe because, well, that's what all the other guys are doing. And this guy's really good. So maybe I'll just do that. In my mind, that's like an unhealthy approach that to me feels more like lifestyle creep versus maybe you're doing it yourself. And you think, man, like, my Saturdays are completely taken up by yard work and I am not able to spend as much time as I wish I could with my kids. And my kids are very important to me. That's that relationship part of that Aspire framework. Right. So that to me feels more like a healthy reason to spend some of your money in a way that's going to move the needle for you or.

[Joel]

I think the reason why. The why behind that choice makes a big difference.

[Matt]

It's all about the intention. Yeah, it's all about the intention. So for instance, like, it makes me think about like an unhealthy work environment. Well, maybe it's worth considering pushing back on something because you're realizing that, hey, this is taking a toll on my body. Like, I am not getting enough sleep. I am working way too much. Is it worth you stepping back a little bit, potentially giving up future raises or a promotion? Some of these different things that would lead to more money, but that's not what you've identified that you're after anymore. You have the money. How is it that you're able to exercise or realize your wealth?

[Joel]

Yeah. All right, so you mentioned the carpool example. It made me think that, you know what's going to impress them more inviting them over and providing all the craft beer for them. And they're like, oh, this person's cool. Who cares if they drive a jalopy? You know, I just, I think the things that we think impress other people don't impress them as much as we think it's probably true. And so, yeah, maybe you're like, oh, they notice that they're checking me out in my sweet Kia Telluride, which, those are good looking SUVs. But I drive a incredibly old and incredibly cheap vehicle. And I don't. Maybe I'm completely wrong and I'm just not reading the room right. I don't think people, people think less of me for doing so. And in fact, the ways in which you can foster a friendship are less about signaling who you are status symbols by the things that you buy and the things that you own. And it's more about the way in which you relate to and care for other people. But Matt, I think part of the spectrum thing, one of the other things we want to encourage people to do is to Figure out where they are along this spectrum of financial independence that we've kind of outlined here today. Start taking the next step towards the next level. Right. So you might say, okay, cool, I am Layoff Phi and I want to get to peace out Phi. That's my next goal. Right. And so just kind of like go through these again. We'll list them all out in the show notes for the episode. And figure out where you are. Because once you know where you are, then it's easier to figure out the path to where you want to get to where you can make to where you can go next. And so I think when financial independence feels like a series of smaller steps, steps versus like. I don't know, Matt, you do CrossFit like a big box jump, which you're actually really good at. That's your thing.

[Matt]

I do like box jumps. I can jump up onto this table right now. Blow your mind.

[Joel]

I'm sure you could, but that's the kind of thing where.

[Matt]

Yes. Got to talk about CrossFit today.

[Joel]

I know that's. Yeah. You can check off your box.

[Matt]

Always an achievement. It's always something I'm. Tell me, do you feel like I bring it up too often?

[Joel]

No.

[Matt]

Thank you.

[Joel]

Yeah. Good. Some people do though. That's like the first rule CrossFit is tell all your neighbors.

[Matt]

I try to intentionally not talk about it.

[Joel]

I know.

[Matt]

Because of the stage.

[Joel]

Yeah. Okay. Okay. But back to that small steps versus box jump. I think people can see that viscerally that the step up the stairs, walking.

[Matt]

Up some steps is going to be a lot easier than like throwing your entire body up onto a 30 inch.

[Joel]

Yeah. It's more practical, more attainable. And so you aren't not to demoralize you. You're not going to achieve financial independence overnight. And you don't need to. You can achieve more and more of it by doing the right things with your money, by saving, by investing more of it while paying off debts steadily along the way each and every month, like clock. But if you can pinpoint your exact location, that can help you get excited about the next goal. And I think it can actually incentivize progress versus demoralizing you that you're not going to be able to do it in one, three or five years. Like it's like, no, I'm just going to continue to experience greater levels of this financial freedom and I'm going to enjoy it as I make that progress.

[Matt]

Yeah, it's all about breaking it down and just doing the next right thing, which I'M pretty sure there's a Frozen 2 song about that. But it makes me think like, you recently talked about the couch to 5K app. And what makes that so successful is that it's. They make it attainable. There are these doable steps. And you know what, there's actually like couch to 10K. There's couch to marathon programs as well, because that's like, you can achieve that. And that's what we're talking about here with financial independence. We're not stopping at 5K. Like, we're going all the way to, like, ultra marathon. That's the level that we're going to. And this also makes me think about when Kate and I went hiking last year at Old Rag Mountain. And it was a beautiful, you know, it was snowy. So it's. Oh, we're walking through the woods, it's great. And then we get to a section of the trail where we get up onto this ridge and we look up and you can kind of see the rockier section. And Kate kind of freaked out a little bit because she was looking at this entire difficult section that we were going to scale, that we're going to like climb, hike over the next hour or two all at once. That can be incredibly intimidating. And that's what it's like when you say, oh, yeah, you, you need $2.8 million in order to retire, which is whatever the recent number is that different news outlets will throw out there. That's demoralizing. As opposed to saying, hey, babe, I know that that looks intimidating and kind of scary, but we're going to take it 30ft at a time. We're going to look at the boulder or whatever portion of the trail that's in front of us, and we're going to conquer that. And then once you do that, you look up ahead, you look up ahead and you realize, oh, well, I can do the next 30ft. I can do the next 50ft. That's what it's like when it comes to achieving that final. Or what do we call it, fully, financially. Fi. Full fi.

[Joel]

Yeah.

[Matt]

That is the overall view when you're looking back at the big thing and you're thinking, wait, we're going to get up to there, like, we're going to achieve that. It's important to have that goal in mind. But does that help you in the day to day with the small movements? No. That's why we wanted to break this down into some of these manageable stages, these more attainable stages of fi that we think can help you to get there more successfully.

[Joel]

I think the other important thing about, about the stage viewpoint, like thinking of it this way, is that who really wants to delay all the best experiences that money can buy until they hit full retirement age? Right. You often can't enjoy them quite as fully at that point in time. And so going back to the fisherman example, that chill existence in the community of family and friends. Right. Owning more of your time in the here and now, well, that'll make you happier than copious possessions in a much bigger house. And I think it'll be he got to enjoy it along the way way as opposed to shooting for it as a goal of just what he can do during those retirement years, during the golden years, after 40 years of hard.

[Matt]

Labor, where you neglect all of those other aspects of life, that's when I'll want to do all those things. But will my health be there? Will my friends be there? Will I be in a state of mind to actually be able to enjoy it?

[Joel]

I would.

[Matt]

We're arguing that no, you will not.

[Joel]

Right.

[Matt]

If you don't practice along the way.

[Joel]

Yeah. And so freedom, we think is the best thing that money can buy because it means you get to call the shots more and more about how you spend your time. And we think that your more rich when you can go on a hike or a bike ride or have a long lunch with your spouse on a weekday, a random weekday, just at the drop of a hat.

[Matt]

That's how to money rich, right?

[Joel]

Yeah. Then if you can afford a yacht, but then you have to work 80 plus hours a week in order to keep it. Like that is not financial independence. That is not a goal worth shooting for for most people. Right. That is not the kind of lifestyle they want to lead. And so yeah, just these stages of financial independence will let you enjoy, allow you, I think, to enjoy your life more and more along the way, way along the journey, as opposed to feeling like you can't come up for air until you hit that gargantuan retirement, a number that's like a decade or two off in the future or even more. Yeah.

[Matt]

If you are, if you've got your first job and you're realizing, oh man, not only do I have to pay off again all of this debt that I've got, but then beyond that I've got to sock aside, set aside this much money that is. Or it can be overwhelming and demoralizing. But. All right, let's shift gears. Let's get back to the beer Joel that you and I enjoyed. Again, this one was From Liz and Tyler. Thank y' all so much for sending this one our way, but this is a hay burner. An American ipa. What were your thoughts, buddy?

[Joel]

This one was more in the citrus direction. Oh, yeah, yeah.

[Matt]

This one reminded me a lot of tropical. Yeah. Just like really juicy and wet and citrusy.

[Joel]

Yeah. Which is, like, honestly, the best IPA coming out of the state of Georgia. That's, like, mass produced. Right. That you can always get in a six or a 12 pack. That is, like, the go to. It's a good one for so many people still. And I agree, this tastes a lot like that one. And if I lived in New York, this might be a go to in my fridge.

[Matt]

Yeah. It feels like the kind of beer that you always have on hand. That way you can be able to offer something to your guests, because that's the kind of lifestyle, that's the kind of wealth I want to be able to live.

[Joel]

Right.

[Matt]

Versus having, like, was it a Telluride? That's your. Your vehicle of choice now.

[Joel]

It's not that expensive.

[Matt]

What happened to the. You still want a Rivian, right?

[Joel]

Someday. Well, when they're used and way cheaper.

[Matt]

Some far off day. Yeah. But, yeah, that's gonna be it for this episode. You can find our show notes up on the [e-mail] and that's also where you can find our credit card tool, which is the easiest way to find a credit card that's offering the benefits that you're looking for. And you can find that there at the top bar on our website. But, dude, that's gonna be it for this one. Until next time, best friends out best. Did it occur to you that he charmed you in any way?

[Joel]

Yes, it did.

[Matt]

But he was a charming man. It looks like the ingredients of a really grand spy story. Because this ties together the Cold war with the new one. I often ask myself, now, did I know the true Yan at all? Listen to Hot agent of chaos on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. This is an iHeart podcast.