015 | Root Of Good | 2nd Generation FIRE And College

March 20, 2017
Jonathan Mendonsa

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Let’s talk about 2nd Generation FI. What changes when you are raising kids after hitting FI yourself or on the path to FI? How do we do college smartly?

Podcast Episode Summary

Our guest: Justin from Root of Good
Justin had access to 401k and the 457 retirement plans
457 plan is an extremely valuable tool for early retirement as there is no 10% early withdrawal penalty
Justin’s early retirement journey: Retirement at 33
Saved over 60% of his income to help retire early
Justin has a wife and 3 kids and was still able to retire early
What does a day in the life look like for Justin and the Root of Good family?
“Optimal spouse selection” is important on the path to early retirement. You both need to align and be compatible with the savings mindset
Being early retired gives you the flexibility to spend your time as you choose and live like a billionaire from a prior era
Justin followed the Early Retirement Forums to model the behavior as he was learning about the path to financial independence
Does it really cost $300,000 to raise a child?
They spend $29,000 to $34,000 per year including luxurious vacations
Quote of the day: “If you want to be average, it’s going to cost 300 grand”
How they save money on cruises for the family: Go in the off-season, look for deals online, and book through a shopping portal like Ebates, don’t book excursions through the cruise line
How does early retirement impact your children?
Great lesson to teach your kids: I worked really hard for 10 years, saved money, and now can enjoy life for the next 50
For people who save money, it isn’t a stressor, it’s a tool to live a better life
You have so much extra time to spend with your children when you are early retired
Significant tax savings from having children
2nd Generation FIRE: How to pass this concept on to our children and teach them to get started even before we did
Planning for children’s college while early retired
How to get college credit while still in high school (AP classes, classes from a local university, etc.)
Once you get to college, how do you pay for it?
How to hack the FAFSA: they don’t look at retirement savings or home equity for calculation
Don’t pay the sticker price for college! Financial aid and scholarships are plentiful
Some elite schools offer full scholarships to “lower income” people of which early retirees may qualify
Will college still be relevant in 10 years and how will you pay for it?
The Hot Seat Questions
Justin’s favorite blog: Millennial Revolution
How Brad uses ToDoIst to put everything in his life on autopilot