Money Guy Show: What FIRE Can Teach You No Matter When You Retire

Release Date: February 14, 2025
Hosts: Brian Preston and Bo Hanson

In the episode titled "What FIRE Can Teach You No Matter When You Retire," hosts Brian Preston and Bo Hanson delve into the Financial Independence, Retire Early (FIRE) movement. They explore how the principles and strategies advocated by FIRE enthusiasts can benefit anyone aiming for financial independence, regardless of their intended retirement age. Through an engaging discussion enriched with practical insights and actionable advice, Brian and Bo break down the essential lessons that the FIRE movement offers to enhance personal financial planning.

Understanding the FIRE Movement

Bo Hanson kicks off the conversation by highlighting the mixed perceptions surrounding the FIRE movement. He emphasizes that instead of debating the merits or drawbacks of FIRE, the focus should be on extracting valuable lessons that can aid anyone on their financial journey.

Bo (00:10): "I think that there are lessons that everyone can learn from some very important things that fire Movement participants and proponents have figured out thus far in their journey."

Brian likens themselves to musicians adept at navigating the "financial independence retire early movement," positioning themselves as tour guides for listeners seeking to harmonize their finances.

Brian (00:30): "I like to think that we're going to be that tour guide today."

Key Lessons from the FIRE Movement

1. Margin Matters

Brian introduces the three essential ingredients to wealth building: discipline, margin, and time. Margin, defined as the difference between income and expenses, is crucial in accelerating financial independence.

Brian (03:06): "If you don't live on less than you make, you'll never be able to build financial independence. And that ability is the margin that creates the money, which is the second ingredient."

Bo elaborates on how FIRE proponents often achieve high savings rates (30-70%) by either drastically reducing expenses, significantly increasing income, or a combination of both. This aggressive approach compresses the timeline to financial independence.

Bo (03:37): "They naturally decrease one of the ingredients, they back down the time they have to work, so they have to really focus on and flex those other two ingredients."

2. Optimizing Finances

Brian warns against extreme savings rates, cautioning listeners to balance ambition with practicality.

Brian (07:24): "When I see 70% savings and investment rates. Wowzer. That's a big savings rate."

Bo introduces the concept of viewing one's career as a means to scale income and, consequently, savings. He stresses the importance of maximizing income potential and leveraging side gigs to enhance financial flexibility.

Bo (10:40): "What you're ultimately doing is creating more margin in your financial life. And the more margin you have, the more you're able to influence your financial timeline."

The hosts also discuss the significance of automation in savings and investments, ensuring that good financial habits are effortlessly maintained.

Bo (16:58): "Can you automate your investments? Can you have your contributions go in automatically and invest automatically?"

3. Clear and Attainable Goals

Setting specific, measurable, and time-bound goals is pivotal for financial success. Brian underscores the necessity of writing down goals, defining actionable steps, and maintaining accountability to achieve a higher success rate.

Brian (21:21): "If you set clear goals now... success rate is around 76%. That's actually actionable creating plan that is successimized."

Bo echoes the importance of knowing one's starting point and having a well-defined plan, coupled with regular check-ins to stay on track.

Bo (22:55): "They also know what their budget is. This is the thing that's going to keep them in line to make sure that they don't steer off course."

4. Using Money as a Tool

Brian and Bo discuss the philosophical aspect of money—not as an end goal but as a tool to create the desired lifestyle. They highlight how strategic financial planning can provide security, flexibility, and enriching experiences.

Brian (27:39): "Money is not a goal in and of itself. It's just the tool, the mechanism, the method that I'm able to build and construct that life that ultimately I want to live."

Bo adds that understanding and defining one’s "why" is essential in aligning financial decisions with personal values and long-term objectives.

Bo (30:45): "Having a clear direction for yourself and your life can not only define the path, but it can help keep you focused."

Applying FIRE Principles to Any Retirement Timeline

Brian shares his personal journey, reflecting on his younger self’s ambition to retire by 50. Although his plans evolved, the disciplined saving and investing habits cultivated during his FIRE aspirations provided greater financial flexibility and the ability to enjoy his career post-50.

Brian (02:17): "20 something year old Brian thought I was retiring at 50... I wake up every morning super excited to come here and create content for you guys."

He draws parallels between the typical millionaire timeline and the accelerated path offered by FIRE, encouraging listeners to start saving and investing early to maximize their financial growth.

Brian (05:48): "Most millionaires are actually minted in their late 40s after 27 years of saving and investing... we've seen somebody who is that aggressive with their savings and investment rates can cut it down to 23 years."

Overcoming Financial Adversity

The hosts acknowledge that financial journeys are rarely linear. They commend FIRE proponents who have overcome significant setbacks, such as low income, late starts, or personal financial crises, demonstrating resilience and adaptability.

Bo (34:23): "Fire folks come from all walks. I mean these are people that were low income earners... They have faced adversity and are still able to come out on the other side without having to sacrifice ultimately what those goals and those dreams were."

Brian reinforces the message of perseverance, urging listeners to adopt an optimistic outlook and seize opportunities despite economic challenges.

Brian (36:06): "There's always going to be some warts on whatever season of life you're in. It's just your choice. Am I going to embrace the opportunities of this moment in time and then, you know, and maximize that and then see if you can build the life..."

Practical Steps and Tools

The episode is rich with actionable advice, including:

• Determine Your Personal Savings Rate: Find a savings rate that aligns with your lifestyle and financial goals.

• Automate Savings and Investments: Simplify the process to ensure consistent contributions.

• Optimize Spending: Use tools like rewards credit cards and strategic purchasing to maximize value.

• Track Net Worth: Regularly monitor financial progress using tools provided by Money Guy Show.

• Set and Celebrate Milestones: Establish short-term goals to maintain motivation and acknowledge progress.

Brian (25:10): "I do feel like we are your accountability plan, we are your community, and I would encourage you jump in, be a part of that."

Bo directs listeners to additional resources, encouraging the use of their financial order of operations and other educational materials to solidify financial strategies.

Bo (23:24): "If you go to moneyguy.com resources, download your free copy of this... We've created that for you so you don't have to waste any of your brain potential figuring it out."

Conclusion

Brian and Bo conclude the episode by reiterating that financial independence is attainable for everyone, regardless of their retirement timeline. They dispel common fears propagated by the financial media, advocating for a proactive and optimistic approach to personal finance.

Brian (32:15): "I don't care what your goal is... financial independence is possible."

They encourage continuous learning and community engagement as pillars for financial success, reminding listeners that setbacks are merely setups for future achievements.

Bo (38:15): "Whether you're part of the fire movement or not... reaching financial independence is still very much on the table for you."

The hosts leave listeners with a motivational push to take control of their financial destinies, leveraging the lessons from the FIRE movement to build a secure and fulfilling life.

Brian (40:03): "You got to own your financial life. Take an active participation role in it or it will own you."

For more insights and tools to enhance your financial journey, visit Money Guy Show Resources. Join their community through live streams or engage with fellow listeners on their subreddit, Facebook group, or Discord to stay accountable and inspired.