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Financial Independence and Early Retirement
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Learning How to Spend Money (While Enjoying Every Dollar Spent)
Nov 14Tap to summarizeAfter decades of saving/investing, it’s hard to immediately flip a switch and go into spending mode. Spending is a skill that you should develop on your way to FI, so that you’re better at it when the time comes to do it. Here’s what worked for me over the last few years: Listen Nowhttps://dts.podtrac.com/redirect.mp3/pscrb.fm/rss/p/traffic.libsyn.com/secure/madfientist/how-to-spend-money.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights How to reframe expenses and recalibrate how you value money (e.g. College Calculation, 0.01% Rule, etc.) Why you should expect inefficiencies/waste as your net worth grows The benefits of splurge accounts and forced annual-spending targets Balancing the idea that “everything is free” with the benefits of incremental improvements The importance of prioritizing “now” over “the future”, while still spending/saving for both How to give more while increasing the personal benefits of that giving Show Links Ramit Sethi – How to Spend (and Actually Enjoy It) Ramit Sethi – I Will Teach You to Be Rich Bill Perkins – Memory Dividends, Time Buckets, and Maximizing Net Fulfillment Die with Zero by Bill Perkins The Wealth Ladder by Nick Maggiulli Full Transcript Mad Fientist: Hey, what’s up everybody? Welcome to the Financial Independence Podcast. I know it’s been a while since I’ve been in touch, but as I mentioned in my last post, things have been busy around here with two small kids, but this episode is a long time coming. I know I’ve been promising this for at least a few years now, and it’s a topic that I’ve been actively focused on since 2019, and it’s getting better at spending money.And I realize that’s a crazy thing for some of you out there to hear that this is a problem. And I completely admit it’s a great problem to have, but I think it’s a very real problem with people that pursue PHI because we’re so good at saving and we’ve saved all our lives and we’ve built an identity around saving, and then all of a sudden you’re just meant to flip a switch and change over to spending and it’s a lot harder than it sounds. So this is something I’ve been working on since 2019 because that’s when I first asked Ramit Sethi from iwillteachyoutoberich.com to come onto the podcast because I figured he was the ideal person to help me become a better spender.And he was, it was a great episode. I asked him back onto the podcast in 2023 to catch up again and review my progress and answer a few other questions I had with regards to spending. And both of those episodes are great. So if you haven’t heard those, I’ll link to them in the show notes, but this is something that I’ve been focused on since 2019.And even though I’ve been making gradual progress, it’s not fast enough because I’m 43 now, and your peak spending years are 40 to 60. So I’m already over 15% of the way through my peak spending years, and I’m still talking about getting better at spending, like it’s some future thing that I need to do and actually I need to do it now.And this really hit home. Over the last few months, because we sent our 3-year-old off to nursery, which I guess in America is preschool. And it was a shock, and I took it way harder than I expected to. I was just like, oh man, this is the first time that our son’s like doing something without us and starting his own life.Without us in it. And it was, it was a big eye-opener and made me realize, okay, this time is so precious and there’s not that much of it. Because in 10 years, in a decade, he’s gonna be a teenager and maybe be too cool to hang out with us. So that was a big slap in the face to say, okay, you need to get better at this now, and there’s no point having a ton of money when you’re 60 and the kids are outta the house.It’s time to get better at this now, and it’s time to do it quickly. So this episode is a compilation of everything I’ve learned over those last six years, the things that have worked best for me. So hopefully it’s useful to you no matter where you are on the five Journey because. The money’s gonna be spent eventually.And if it’s all given away after you die, that seems like a shame. And as Bill Perkins said, in Die With Zero, “When’s the party?” And that’s also a great interview to listen to if you haven’t heard that one yet. I’ll link to that in the show notes. But yeah, when’s the party and there’s gonna be a party, and when is it?And that’s what I’m starting to think of now, and I definitely wanna be a part of it. So, to kick things off, I’ll start with something that helps to unwind some of those previous habits that were useful for saving towards FI but have now become less useful when I’m post-FI. And that is less specific tracking.Pre FI, I had a spreadsheet that broke down all of the spending categories, and I was able to tally ’em up every month and see how they changed and all that sort of thing. And that you can still download that spreadsheet at madfientist.com/spreadsheet. And that was the one that served me well to get to FI. But after FI, I don’t need to or want to track all of those individual categories. It’s a waste of time, mental energy, and it’s actually counterproductive because what gets measured gets managed, and I don’t wanna manage it anymore. I don’t wanna see that I spent over budget on restaurants the month before, and then not go out to a restaurant this month because of it.I don’t care. It shouldn’t matter, and it doesn’t matter. So the first thing that I had to do was just. Streamline my financial tracking and just track the main thing, which is net worth. And that’s really all that matters at this stage. So if you go to madfientist.com/post, you’ll find my post-FIRE spreadsheet that I created, and that’s what I’ve been using instead ever since I left my job because I just don’t care about the details anymore.And it’s more a big picture thing. And I’ve actually built some custom software that I’ve been also using. So if you wanna become one of the beta testers for that, make sure you’re on the email list. And if you’re not, you can just go to madfientist.com/advice, and you can sign up to the email list there.But it’s something that I’m gonna hopefully be releasing next year, and it’s been helping me to not only keep track of my spending at a level that I want to, but also makes it more fun to spend that money and save for specific things. So that was the first big change. And then the second one is trying to recalibrate my brain because I don’t know about you, but my brain is trapped at 20.I still feel like I’m 20. I still feel like I can do the things. I can do it when I was 20, and I am definitely far from 20. So I still sort of feel like I have the net worth I did at 20. So, for instance, back in college, if I had a friend come up to me and say, do you wanna go out for dinner? And they picked a place that was gonna be over 10 bucks, I’d be thinking twice about it. because I’m like, oh, 10 bucks. That’s a lot. I don’t need to blow 10 bucks on dinner tonight. And it’s crazy. But 10 bucks still feels like a lot of money to me because of that. And that was like sort of my like cutoff number of, all right, this is something I should second guess, or I shouldn’t second guess this.So, to recalibrate my brain. I took $10 and I divided it by my net worth at the time. And then I’ve multiplied that by my current net worth to find out, alright, what is $10 equivalent to now? And that calculation is mind blowing because it was really the first time that I appreciated that random number in the bank that I’ve been looking at for all these years and it’s, it made it seem like, whoa, okay. I am on a whole different level these days, and these small purchases, or even...
Transcribe →Valuable Lessons from My Eighth Year of Freedom
Sep 3, 2024Tap to summarizeIn 2021, I decided to stop doing annual updates. At that time, I thought I had FI figured out and was just living a “normal” life (so no need to talk about it anymore). Well, a lot has changed since then! Turns out, I didn’t have everything figured out :/ I explain more in today’s short podcast episode: Listen Nowhttps://traffic.libsyn.com/secure/madfientist/eighth-year-of-freedom.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights How the pandemic changed my outlook on the future Why my post-FI life is drastically different from what I imagined it would be Learning how to use money for the first time The reason I’m focusing more on other investments (and what those investments are) Why stock picking isn’t great, even when your stock picks outperform Show Links First Year of Freedom Second Year of Freedom Third Year of Freedom Fourth Year of Freedom Fifth Year of Freedom Full Transcript Mad Fientist: Hey, what’s up, everybody. Welcome to the FInancial Independence Podcast. So three years ago in 2021, I decided to stop doing my annual updates. And if you’ve followed the podcast for a while, you know every year since I left my job in 2016, I’ve done an annual update talking about what I learned over that last year.And when it got to 2021, I felt like I was really just living normal life, and I was getting bored making the annual updates because I didn’t really think much had changed. And I didn’t know if I was actually giving any sort of meaningful advice to anybody by just talking about what I had been doing for the past year.So I decided to stop doing them and it’s amazing how much has changed since then. So one, I don’t have it all figured out and I’ve learned a lot over the last three years, so I figured I could share what I’ve learned over those last three years and maybe start doing these annual updates again if I continue to learn things, but I’ve also realized that things are going to get really weird with AI over the next decade, and content is going to be able to be created instantaneously by computers.And really the only thing I have is my human story. And that’s the most important thing. And my unique experiences that I can share and the lessons I learn through actually living this sort of lifestyle. So both of those things combined made me realize that, Hey, I should maybe do another one of these at least. And then maybe continuing to do these in future years if I have some interesting things to share. So anyway, so this is my eighth year of freedom post, and I can’t believe it’s been eight years. That’s absolutely insane, and it was actually August 1st that I left my job, but I’m not really on a good schedule these days, and so this is over a month late.But hey, better late than never. Anyway, I hope you enjoy it, and this is valuable lessons from my eighth year of freedom. So the biggest thing since 2021 is really that I feel like I’m actually using money for the first time. My entire life has been saving money, investing money, hoarding money pretty much.And I don’t think I’ve ever even tried to use it because using it was always the last resort. And if I was using it, that was a mistake because now that money can’t grow anymore. And it’s been a huge mental shift to now try to use it when I’ve just spent my whole life accumulating it. It’s been a lot of fun and I have a article coming out soon, if I can get around to writing it, talking about learning how to spend and actually enjoying it while I’m learning how to do it. And I think that’s been the biggest change. And particularly we bought a house last year. Our last house, I think we sold in 2014 and we’ve just been renting ever since and renting has been great.But now that we have a son and we want to settle down and we don’t want to have to move every year if we don’t want to. I know my wife never wanted to move every year, but I was always keen to try something new. But now that we have a son in the picture just having a stable place that we can put all our stuff, and as parents out there know you have a ton of stuff when you get a kid, because grandparents just keep buying them stuff.So we decided to buy a house and that’s been a great purchase. And this is actually the third house we’ve owned. We owned a house in Scotland back in 2005, and then we bought a house in Vermont in 2011. But this is actually the first house that I’ve enjoyed owning. For anybody on the path to FI out there who is like me and was just like very motivated to get there as quickly as possible, I don’t think I should have owned houses back then, because any unexpected expenses that came up, I would stress about them and yeah, owning a house is nothing but unexpected expenses. So I think yeah, if I was doing it again, I’d probably rent most of the time that I was on the path to FI and then buy after because now I can actually enjoy it and I am enjoying it. It is a luxury. It is a splurge and it’s a great splurge because I’m talking to you from my perfect home studio that I’ve spent months and months designing and building. And I love it so much. And yeah, if I was as tight with money as I was back in my FI days, I wouldn’t have this studio. And I would have been stressing about all the unexpected expenses that have already popped up over the last year and a half. So homeownership has been amazing. And again, if you would have told me this eight years ago that I’d want to be a homeowner again after the horrors of my previous two homeownership stints, I would have said you’re crazy, but that just shows how much changes as you get older and as your priorities change.And the other big thing that I would be surprised about back then that I am loving now is stuff. So even though I just was talking about being overwhelmed by too much kid stuff, buying stuff for the house has been a lot of fun. And it adds to my daily joy. So yeah, I didn’t think stuff actually increased my happiness, but it really does.And I think it’s mainly because I’ve gone so long without any good stuff. So as we were renting, we would always have furnished rentals. And since we moved so often, I hated packing up boxes and moving. So I just limited the amount of stuff I had. So that was, that just meant that we used, all the rental house’s kitchen stuff, and whatever TV was on the wall and sound system was there, we just used that.But, now that we have our own home, and we know we’re staying here for a while, I bought nice things that I really do enjoy. So anything from, the coffee grinder that I’ve talked about many times on this show and other shows, to just like really nice mugs, to a great sound system for the TV and speakers in every room that make music sound so good and I can just turn it on instantly and just have music following me around the house.And then obviously the studio is just kitted out with everything that I’ve ever wanted. Speaking of the studio, I’ve set it up so that I can do a video from here now. So if you want these podcasts to be in video form in the future, go to madfientist.com/youtube and follow me there. And if I get enough YouTube followers, I’ll start to make the efforts to do video, which would require me to actually shower before recording these, which today, that did not happen so I’m glad this one’s audio, but. If I get enough followers on YouTube, then I’ll start doing these in video and I’ll give you a little tour of my home studio, which is incredible. So go to madfientist.com/youtube to follow me on there. So those are two big changes, my love of home ownership and love of stuff.But going back to the initial point where I’m actually using my money for the first time, I realized that’s a big mistake I made on my journey to FI was just disregarding the fact that actually one day you are going to spend your money...
Transcribe →Bill Perkins – Memory Dividends, Time Buckets, and Maximizing Net Fulfillment
May 2, 2024Tap to summarizeOut of all the episodes of the Financial Independence Podcast, this is the one I wish I heard when I was on my journey to financial independence Bill Perkins, author of Die with Zero, joins Chris Hutchins on the All the Hacks podcast to discuss what money is really for – maximizing net fulfillment. This interview is incredible, so I reached out to Chris to ask if I could share it with you all, and thankfully he agreed! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/bill-perkins-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights Why you should maximize for net fulfillment rather than net worth When is the best time to allocate money to get the most fulfillment Why you should time bucket your experiences instead of having a bucket list How to break out of earning-saving-investing autopilot Why you should fear wasting your life more than running out of money Show Links All the Hacks Podcast Chris Hutchins on Twitter Die with Zero Book Bill Perkins on Twitter Related PostChris Hutchins - Why You Should "Retire" Before You Hit Your NumberThe founder of Grove shares important lessons he's learned as an entrepreneur and explains why you may want to quit your job before you hit your FI number!The post Bill Perkins – Memory Dividends, Time Buckets, and Maximizing Net Fulfillment appeared first on Mad Fientist.
Transcribe →The Best Advice from JL Collins
Dec 5, 2023Tap to summarizeTo celebrate the release of JL Collins’ new book, Pathfinders, I collected all the best advice from his Financial Independence Podcast interviews! JL has been on the show three times: First, back in 2012 (he was my second guest ever!) Second, when his hit book, The Simple Path to Wealth, was released Third, during the depths of the Coronavirus crash That last interview may be my proudest moment as the Mad Fientist (I explain why during the show). Hope you enjoy this jam-packed episode! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/jl-collins-highlights.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights The power of FU Money and why it may be less money than you think JL’s biggest investing mistake and what he learned from it Why index investing is superior to active investing Are REITs and international funds necessary Why your house may not be a good investment Thoughts on stock picking and actively-managed funds What makes Vanguard unique and why it’s best for investors The three keys to becoming wealthy Lessons learned from Black Monday How to prepare for the next market crash Show Links First Interview: JLCollinsNH – The Importance of F-You Money Second Interview: JL Collins – The Simple Path to Wealth Third Interview: Coronavirus Market Crash – Is This Time Different? JL’s Website – JLCollinsNH.com The Simple Path to Wealth How I Lost Money in Real Estate Before it was Fashionable Pathfinders: Extraordinary Stories of People Like You on the Quest for Financial Independence―And How to Join Them Related PostThe Best Advice from Mr. Money MustacheTo celebrate the 10-year anniversary of the Financial Independence Podcast, here are the highlights from my first guest - Mr. Money Mustache! The post The Best Advice from JL Collins appeared first on Mad Fientist.
Transcribe →Jillian Johnsrud & Chad Carson – Small and Mighty Real Estate Investing
Aug 23, 2023Tap to summarizeOn today’s episode of the Financial Independence Podcast, I welcome back Chad Carson from CoachCarson.com! Chad just released a new book called The Small and Mighty Real Estate Investor, and I wanted to get him back on the show to talk about it. I’m not a real-estate investor though. So rather than interview him myself, my real-estate-investor friend, Jillian Johnsrud, did the interview for me! You may know Jillian from Montana Money Adventures, or her new podcast – Retire Often. She did a fantastic job, so I hope you enjoy their conversation as much as I did! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/jillian-and-chad-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Show Links Coach Carson Website | Twitter Jillian Johnsrud Website | Instagram The Small and Mighty Real Estate Investor Amazon | BiggerPockets Full Transcript Coming Soon! Related PostChad Carson - Retire Early with Real EstateChad Carson joins me again on the Financial Independence Podcast to talk about the best strategies you can use to retire early with real estate!The post Jillian Johnsrud & Chad Carson – Small and Mighty Real Estate Investing appeared first on Mad Fientist.
Transcribe →Ramit Sethi – How to Spend (and Actually Enjoy It)
Feb 17, 2023Tap to summarizeOn today’s episode of the Financial Independence Podcast, I welcome back Ramit Sethi from I Will Teach You to Be Rich! I needed someone to come on the show to provide some tough love and Ramit was the only person for the job. As Ramit mentioned during our last interview, FIRE people are great at knowing what NOT to spend on but we’re not good at knowing what to spend on. Spending is going to be a big focus on the Mad Fientist this year and I can’t think of a better way to kick off this discussion than by getting yelled at by Ramit so hope you enjoy it! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/i-will-teach-you-to-be-rich-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights Why we doubled our annual spending (and was it worth it) What Ramit did to make me get all clammy and uncomfortable Why pay less when you can pay more How to imagine your own rich life Why you should start wasting some money at a certain point Show Links I Will Teach You to Be Rich I Will Teach You to Be Rich Podcast Episode 16 – “We’re worth $8 million but I comparison shop for strawberries” Episode 40 – “We’re worth $5 million, but my wife nearly canceled our trip to save $200” Money Coaching with Ramit Sethi Ramit on Twitter | Instagram | TikTok Full Transcript Mad Fientist: Ramit, thank you so much for being here again. I really appreciate it.Ramit Sethi: Thanks for having me back. Mad Fientist: So, it’s been over three years since our last interview, which is crazy. It seems like yesterday. And you’ve been really busy with some new stuff since then, which I’m excited to talk to you about. But there’s one particular topic that we touched on back in our first interview that I really want to dive into today because I think it’s a huge problem in the FIRE community and it’s a problem that I know I have, and it is the fact that FIRE people aren’t very good at knowing what to spend on.We’re great at knowing what not to spend on, as you mentioned in our interview last time, but we’re not good at knowing what to spend on. And since we talked, I’ve been really working hard at this over the last couple of years and I want to talk through that. But you are the perfect man to push me further and hopefully push everyone in the audience further because I’m sure this is not a unique problem to me.What do you think about that? Ramit Sethi: I think that’s true. I think that a lot of people have been taught well… I think that the world teaches us to save, but nobody teaches us to spend. And if you take that concept of frugality to the logical extreme, then you start to see saving money as a virtue and spending money as a sin.And it’s not, that’s not how it is. In fact, the point of living a rich life is not to save money. It’s not. The point of a rich life, in my opinion, is to design a rich life that excites you and then use your money to live as meaningful of a life as you can. So I’m all for a high savings rate and aggressive investments and earning more. I’m totally for that. But there’s another side of the equation that too many people ignore and that’s what I’ve been very excited about. Mad Fientist: This is interesting because your site is I Will Teach You to Be Rich. Your book is, I Will Teach You to Be Rich. And I’ve always read that as I will teach you to become rich.But it was only recently as I’m getting into your podcast more and I’m getting into the journal you just released, that I realized that it actually is, I will teach you to be rich and that’s very different than becoming rich. Ramit Sethi: That’s right. Mad Fientist: And my question is, was that intentional because obviously you started the site way back in the day.But were you thinking about that way back then? Or were you thinking of it in the same terms as I was as I would teach you to become rich? Ramit Sethi: It is about being rich and I think that we should live a rich life today and an even richer life tomorrow. So I don’t like the idea of I have to wait until I’m 75 years old and maybe just, maybe I can go take that Alaskan cruise or treat my family to a nice dinner.I don’t wanna live that kind of life. And so, yeah, it’s about being rich and being rich can happen even if you have credit card debt, you can still be rich. So the next question that naturally comes up is what is rich? And I think this is where it gets really interesting, this concept of rich for a lot of people, the first images that pop up in their head are you know, being chauffeured around in the back of a limo, wearing some fur coat and eating on some table that holds like 70 people with some butler.I’m like, guys, that’s Hollywood. That’s Richie Rich. That’s not reality. A rich life is so diverse. It could be buying a beautiful coat. It could be traveling two months a year. It could be having the freedom to pick up your kids from school every afternoon. So a rich life is yours. It’s not mine, it’s yours.And you define what it is. And if we start from that premise that you decide what your rich life is and suddenly it becomes a lot more exciting to be able to use money to live that life. Mad Fientist: Absolutely. Okay. And I’m, and that’s why I’m so excited to have you on, and you’re the only person that I could think of to get on for this sort of topic.So over the past couple of years, you’ve released a couple of things that are actually very helpful for this goal. So if you could, since I’m gonna be referencing them so many times, would you just tell the audience who may not be familiar with your podcast and your new journal, what those both are about?And then obviously I’ll be using those a lot as we continue this discussion.Ramit Sethi: Yeah. So initially I wrote my book, I Will Teach You To Be Rich. It came out in 2009. I re-released it the 10 year edition in 2019, and I had added about 80 pages of material. A lot of money psychology new material. Also, things had changed in the world, and things had changed in my life.I had gotten married and I had become much more interested in money and relationships. As I started to talk about this, I realized that I wanted more material on this, and I wanted to help people get more excited about money. I use that word excited intentionally because when you asked the average person what words come to mind when you think of money, they go stress, overwhelm, guilt, am I too late or restriction.I know you FIRE guys love the word restriction. Oh, I love it. They actually love it. I love it. It’s like someone who has a little scab on their arm and they go, Ooh, I’m gonna pick at this scab. It’s like, stop it, man. You know? Okay. You can restrict a little bit, but it’s not the point of money. So, a couple of things that I did. First I created a podcast, and the podcast is called I Will Teach You Be Rich. And on this podcast you can actually hear me talking to real couples. I’ll just share one example of a couple who has $825,000 in debt and they’re worried that they can’t afford to have children.On the other hand, you have a couple who has over $10 million of net worth and they still agonize over the price of blueberries, and they still, they can’t go on a vacation that they want to, they only go where the points will allow them. And I go, at what poin...
Transcribe →My Family – Raising Money-Smart Kids
Dec 14, 2022Tap to summarizeOver the last few years, I interviewed members of my family to find out two things: How I became the Mad Fientist (i.e. where did I get my extreme ideas about money) What advice they’d give to parents hoping to raise money-smart children This is a short but sweet holiday episode to end the year and I hope you enjoy it! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/my-family-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Full Transcript Coming soon Related PostMy Brother - Using the Power of Money to Pursue Your PassionJoin me for an interview with my little brother that we recorded live in Venice! We talk about growing up, extreme frugality, and how you don't need to wait until FI to use the power money gives you to pursue your passions.The post My Family – Raising Money-Smart Kids appeared first on Mad Fientist.
Transcribe →The Best Advice from Mr. Money Mustache
May 31, 2022Tap to summarizeExactly 10 years ago, I released the first episode of the Financial Independence Podcast! To celebrate this big birthday, I’ve collected all the best advice from my interviews with my very first podcast guest – Mr. Money Mustache! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/mr-money-mustache-highlights.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights Mr. Money Mustache’s investing strategy Thoughts on real-estate investing vs. stock-market investing How to invest in a raging bull market The benefits of hitting FI before having kids Why you’ll likely make money after retiring early Mr. Money Mustache’s biggest splurge How to decide whether to pay off your mortgage early The best part of financial independence How to find meaning after early retirement Most challenging part of post-FI life The impact of financial independence on personal relationships Show Links Financial Independence Podcast Episode #01 – Mr. Money Mustache – Early Retirement Made Easy Episode #24 – Camp Mustache – Q&A with Mr. Money Mustache, Afford Anything, & Military Guide Mr. Money Mustache Related PostMr. Money Mustache - Early Retirement Made EasyMr. Money Mustache shares his financial independence and early retirement secrets in an interview for the Financial Independence Podcast!The post The Best Advice from Mr. Money Mustache appeared first on Mad Fientist.
Transcribe →Aime to Invest – From Bankruptcy to FI in 8 Years
Apr 25, 2022Tap to summarizeOn today’s episode of the Financial Independence Podcast, I speak to Patrick Aime from Aime to Invest! Patrick’s journey to FI is an incredible one. He… Moved from his home in Rwanda to attend high school in Europe and college in America Stayed in America after college and started working in the feast-or-famine world of sales Started his own company and grew it to $5 million in revenue in four years Used his success in business to invest in rental properties and live a lavish lifestyle Lost everything during the 2008 global financial crisis and had to declare bankruptcy Found FIRE and drastically reduced his expenses and started saving for the long term Rebuilt a smaller business and started investing in short-term rental properties in Mexico Utilized geographic arbitrage to lower his expenses even further Hit FI 8 years after declaring bankruptcy and became a millionaire 2 years after FI Patrick shares everything he learned during his rollercoaster financial journey so hope you enjoy the interview! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/aime-to-invest-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Show Links Aime to Invest YouTube Channel Frugal Safari Website Patrick on Twitter Mad Fientist’s FI Laboratory Full Transcript Mad Fientist: Hey, what’s up, everybody. Welcome to the Financial Independence Podcast, the podcast where I talked to some of the best and brightest in personal finance to find out how they achieved financial independence. I’m really excited about today’s show. I’m talking to a buddy of mine named Patrick, who I met way back in 2016 at FinCon San Diego, which is a financial conference.And he was a Mad Fientist listener at the time. And just came up and talked to me and my wife. And I quickly realized one, he’s a really fun guy to talk to, but also he had a really interesting story to tell. So I’m excited to share it with you today. Patrick’s story is a bit of a rags to riches, to rags, to riches story.And there’s lots of stuff that he learned along the way, and I’m excited to dive into some of it, but a brief summary… he built up a multi-million dollar business over the years, and he was living the multimillion dollar entrepreneur lifestyle a bit. And sadly it all came crashing down during the global financial crisis.So he had to eventually declare bankruptcy and start from scratch again. And when he was rebuilding up his life and his business, he realized he needed to get his personal finances in order. And that’s how he ended up finding the financial independence world. And that led to him completely changing his outlook on spending.And he ended up trimming his expenses to less than 50% of before the financial crisis. And he was able to build up his business and his investments, and he was able to reach financial independence in just eight years after declaring bankruptcy. So it’s an incredible story with lots of lessons learned, no doubt. So without further delay, Patrick, thank you so much for being here. I really appreciate it! Patrick: Thank you for having me on, Mad Fientist. This is an honor to be on your podcast.Mad Fientist: So we go way back. We met back in 2016 at FinCon San Diego. And I have to say out of my entire decade of being the Mad Fientist, I think when I met you, that was the coolest I ever felt. And it just so happened to be, my wife was there and she got to experience it too. So yeah, if we just go back to 2016 and we were just milling around in some big convention hall and you came up to me and you just said some very kind things in front of my wife, and I could just tell by her face, she’s like, what is going on here?This guy is like, he looks like a really nice normal guy smart. And he’s saying all these really nice things about, you know, just weird financial writing on the internet. And yeah. So I have to say thank you for that. That was a highlight of being the Mad Fientist.Patrick: That was crazy. I remember that too. I was talking about how I first met you. I actually was, I met JD Roth first, and then I was like "Do you know the Mad Fientist?" He was like, of course, you know, because I knew I had listened to your podcast when you interviewing him. And I know, is that, can you introduce me to him and was like, Hey yeah, sure.You know, so, and then when I met you, I was, I was star struck, dude. I remember when I asked you to get to take a picture with you and your wife was looking at us, like what’s going to picture him here.Mad Fientist: Exactly Patrick: Yeah, and for me, I I’m the sports marketing industry. So we do a lot of big corporate events or we know the big sporting events. So I get to meet a lot of celebrities you know, Hollywood and sports celebrities. And but I don’t get as star struck as, as well as when I met the Mad Fientist, that was like, I gotta get a picture.Mad Fientist: That’s what you said that, yeah, that, that reminded me. You said something about like, yeah, like you had met some famous basketball player or something and and yeah, you’re more excited to meet me. And like, I was just as dumbfounded as my wife, because I’ve just been writing some weird financial stuff into the internet and never expected any sort of a response like that.And and yeah, it was, it was pretty special. So I, I appreciate all the kind words and it was good to meet you all those years ago and hear some of your story, which I’m so excited to get into today, obviously. And so yeah, thanks for taking the time.Patrick: Being on your show is definitely a highlight of my FI experience because you’re the reason why I started this whole FII journey and to be on your show after all these years is basically a bucket list type of opportunity for me. So thank you again.Mad Fientist: Oh, no, my pleasure. And yeah, like I meant to do it a long time ago because when we met in 2016, I was like, wow, Patrick has such an interesting story. I need to get them on the podcast, but then completely forgot all about it after that. And then it wasn’t until recently, just a few months ago, you had tagged me on a YouTube video that you had published.And I watched it and was like, oh yeah, this is why I was to have Patrick on all those years ago. So I’m so excited. We’re getting to do it today. So for my audience who is not familiar with you, could you maybe just tell a little bit about yourself and how this whole FIRE thing came about for you? Patrick: Definitely. So I’m originally from Africa, east Africa, the small country called Rwanda, and we’re best known for having a mountain gorillas that you can actually visit in the mountains in the wild, which is one of those experience that you have to to do if you have a chance. And so I grew up in Africa, very modest lifestyle, single mom.And when I was 14, I had a chance to go to high school in Belgium and and I took it. And then so I went to high school in Belgium. I was playing basketball. And then a few buddies of mine, teammates, were playing in the US and so had a chance to go to college in the US.And of course that took it because being from Africa, having a chance to live in America, it’s too big of a dream. You know, because for us going to Europe is somewhat an achievable dream because it’s not that far and a lot of people have done it. And so for a kid out of Africa, especially my country Rwanda, a lot of people go to Europe or even South Africa, which is a modern African country to really experience I guess the first world living.And then when I got a chance to come to the US I took it and my plan was to come here do the whole collegiate experience and then go back to Europe and play at a pro level, like a lot of my friends were doing, but I hurt myself my second year. And then it wasn’t the same anymore.So that dream was was done. And the...
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Dec 15, 2021Tap to summarizeI have some big news… I am now a British citizen! In honor of finally getting my UK passport, and therefore completing this long journey to citizenship, I am releasing my UK FIRE episode. Barney, from The Escape Artist, joined me in my Edinburgh apartment (before the pandemic) to discuss all things related to financial independence and early retirement in the UK. Hope you enjoy it! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/escape-artist-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights The cultural differences between US/UK that affect pursuing FI How to escape from the prison we create for ourselves Translating US investing terminology to the UK (e.g. 401k→pension, IRA→ISA, etc.) Is it easier to reach FI in the US or UK Class structure in UK and how pursuing FI forces you to traverse all classes Why FIRE isn’t bigger in the UK Difference between the different types of ISAs Is tax hacking possible in the UK Real-estate investing in the United Kingdom and the fantastic Rent-a-Room scheme How to use geographic arbitrage to reach FI sooner Show Links The Escape Artist Full Transcript Mad Fientist: Hey, what’s up, everybody. Welcome to the Financial Independence Podcast, the podcast where I get inside the brains of some of the best and brightest in personal finance to find out how they achieved financial independence. Today’s episode is a long time coming. I actually interviewed my guest two years ago, which because of the coronavirus pandemic seems like a lifetime ago.But the reason I haven’t published the episode yet is because I’ve been waiting for something really special to happen…and that just happened last month. I’m excited to tell you that I am now British, which is something I never expected to be in my life, but I’m so happy that I am at this stage because over the last six plus years, I’ve been sending in lots of money and applications and spending lots of time trying to get my British citizenship so that I can just come and go as I please.And thankfully that finally was successful and now I’m a dual US/UK citizen, and I couldn’t be happier. So to celebrate, I’m finally releasing the UK episode and I’m excited to introduce my guest, who is Barney from The Escape Artist. And those of you in the UK will know Barney cause he’s probably one of the biggest FIRE blogs in the country.So when Barney was up in Edinburgh for the Edinburgh festival in 2019, he stopped by my flat and we sat down for an hour and just chatted about FIRE in the UK. And we dove into a lot of, you know, UK-specific stuff, but we also compared it to how people in the US pursue FI and the differences between the two countries that make some things easier and some things more difficult.So without further delay… Barney, thank you so much for being here. I really appreciate it. Escape Artist: Hey man, it’s great to be here at last. Mad Fientist: So this is actually a real weird one for me. You are actually sitting in my living room, which I don’t think I’ve ever done one at home before. But you came up from London.We were going to do it in a pub or somewhere cool, since this is the UK episode, but I realized I don’t have my traveling mic. So you had to come to my apartment and use the one that’s attached to my desk. So welcome to my flat.Escape Artist: Edinburgh is just beautiful. It’s just such a cool city. And it’s great to be here while the Fringe is on. Mad Fientist: Yeah, the Fringe is the world’s largest arts festival. Well, it’s part of the world’s largest arts festival and it’s the whole month and it’s just one big party in the city. So you’ve definitely come on the right day. So, so yeah, this is the long awaited UK episode. I’ve gotten so many emails from UK readers asking, you know, what’s the differences between the US and the UK and you know, how do you pursue FI in the UK and all these things, and you’re going to be the man to help with that.But before we get into all that, can you maybe just give my audience a little bit of details about yourself and give a little background story about how you achieve financial independence? Escape Artist: Sure. I think that for a lot of people that are financially successful, if you kind of scratch the surface, there’s often a trauma kind of in their earlier life that got them started on that path.And for me when my parents, when my parents moved house when I was 11 years old back in 1981, they did the classic British thing. They bought the biggest house they could, they took out as much debt as they possibly could. And their timing was awful because this was 1981. And interest rates went to 17% and my parents kind of had this realization that they’d overstretched themselves.And so they had then to do a kind of period of belt tightening and the newspaper got canceled. My dad stopped buying beers, started brewing his own beer. The holiday got canceled that that year. And I think I took away from that was that debt was a kind of very scary thing. And ultimately the bank could kind of take the house away from you.And so kind of from that point on, you know, I made choices in my, in my education and in my career that would put me on that path to kind of having money. And so, you know, when I went to college, I studied economics. When I graduated, I chose like a, really a profession where I could earn safe money. So I trained as a chartered accountant and qualified, and then worked in corporate finance for 20 years.And really for the last 10 of those years, I was very focused on just putting away as much money as I could, because I’d had an experience at one of my jobs where I realized that kind of I was trapped. I had I had a mortgage at that point. We had children on the way. My wife had given up her job and so the whole kind of burden of providing for the family was on my shoulders. And I, I took a job that I hated. And from that point onwards, I saved at least half of my income every month. Fast forward to 2013 and I realized that I had enough. Mad Fientist: Yeah, you said you were trapped, which maybe leads into the whole theme behind your blog so maybe you do want to tell the story about the escaping from the prison camp. Escape Artist: Yeah, so the prison camp is my kind of analogy or my metaphor for the situation that a lot of us kind of put ourselves into where we kind of create our own prison. We trap ourselves through our spending choices by taking on debt, by kind of societal expectations.And that can lead you to a point where you’re no longer happy doing that, you know, doing a job, but you feel you have no choice, but to carry on doing that. And, and I, I certainly felt trapped at that time in my life. And I just couldn’t see a way out of the prison camp other than to kind of slowly dig my way out stone by stone, rock by rock, but by saving money.And that the prison camp analogy is based on a kind of World War Two story of, you know, The Great Escape, the film, The Great Escape, where the prisoners literally kind of dug their way out to the prison camp in this amazingly kind of painstaking, slow, laborious process. And that, that kind of amused me that analogy.Mad Fientist: That’s great. And I want to go back to something you said, you mentioned, what was it? 17% interest. Escape Artist: Yeah, yeah, absolutely. One day there’ll be 17% again. And you kind of wonder what the world will look like at that point. Mad Fientist: It will look very different. No doubt. Yeah. That’s I just released a post not too long ago about whether you should pay off your mortgage early or something.And I’m definitely in the camp where I’m just looking to buy a house just so I can lock in some of these low, low interest rates. Cause they may potentially be, you know, once in a lifetime interest rates and yeah, it would feel pretty good to have a 30 year mortgage at 3% or something. If, if interest rates do go up to what they were before.Escape Artist: Well, everything in finances is cyclical.The problem is, you know, history n...
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