047R The Rule of 72

047R |The Rule of 72

In today's podcast we recap Episode 47 with Bryce and Kristy from Millennial Revolution including talk of home ownership and world travel, but a reader case study and voicemail.

In Today’s Podcast we cover:

  • A recap of our main takeaways from Episode 47 with Kristy and Bryce from Millennial Revolution
  • How Brad explained the concept of compound interest to his daughter Anna and it was a lightbulb moment
  • How Brad’s daughter immediately took action and invested her money in Vanguard index funds
  • Brad’s moment where he found the concept of compound interest as a 19 year old
  • Calling for tips on how other parents have introduced financial skills to their kids
  • How your house is not a great investment and for people in the FI community it isn’t “your biggest investment”
  • Your home may be a terrible investment but it doesn’t mean it’s a terrible decision
  • Home appreciation seems “magical” to people but it actually represents well below the 8% return benchmark we use as a guide
  • Brad’s example of a $300,000 house and the expected future value
  • How Bryce and Kristy have these amazing hacks to travel for little money
  • Their entire lives cost $30,000 for a full year
  • Time averaging in low and high cost of living areas
  • A reader case study that was sent in to Bryce and Kristy on the rental property they have that’s underwater and how they should move forward
  • Voicemail from ChooseFI community member Jack on finding FI and making amazing changes up to a 58% savings rate
  • How everyone can pursue FI and it isn’t limited to certain incomes, professions, etc.
  • Itunes review and book giveaways

Links from the show:

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3 thoughts on “047R |The Rule of 72”

  1. It’s so exciting to learn about new financial opportunities. Especially with something so seemingly simple yet so profound. I enjoy being introduced to new things like different ways to invest. I also thought it was so interesting that buying a house is actually a really bad investment.

  2. I taught exponential growth and decay to the freshmen in my Algebra class on Friday. It is so fun to see their eyes light up when I pull up the compound interest calculator. We discussed the history of index investing, the rule of 72, the power of compound interest, and the depreciation effect on the value of a new car. We brainstormed ways to increase our savings rate, and we invested the difference. In one class we even touched on the 4% rule. It was exhausting, but it is my favorite lesson to teach!

  3. I’m glad the roundup episode sort of tempered the main episode…I’ve tried several times and can’t make it through episode 47 completely yet…it was so one sided and anti home ownership that it was a massive departure from how you guys normally approach a subject. The Geoarbitrage bits were definitely interesting. I will certainly try to listen to it again and gain whatever I can because even the lopsided advice can often have something useful to gain from it. A house is certainly not better than VTSAX, but up until the most recent tax changes, the write off for interest used to be a lot more help than it is now. Also rent matters, plenty of people don’t want to move from their city because of family or job or whatever, and when rents in our area were around 2k or more easily…in decent areas that I would feel safe living in…it made it very easy to buy. But we stayed within our means. We found the 250-270k house in a neighborhood full of 350-400k houses…so it’s all about being smart with your decisions. After 3 years our house is worth 415k (we had it appraised recently) which is a fantastic return, that I know will level off…as Brad pointed out, there are no 300k houses from the 80’s worth 2.4(ish) million now. Though, a 300k house in the 80’s would have been a pretty amazing house since 300k in 1985 was worth about 700k in today’s dollars. If your’e not letting all the downsides of lifestyle inflation creep into your life and having crushing debt…then a house can make a lot of sense. People like to constantly bring up all the taxes you pay owning a home…well, if you rent you are still paying it, you think the landlord is being nice and paying it for you while lowering your rent…no way, you’re paying all of it and likely turning that landlord a profit every month if they were smart. That’s how our rental is at least. SO while there are still markets in the country where renting is much better than owning, they are disappearing in the bigger cities. Anyways….I’m trying to catch up on episodes so sorry to rant so long on an old episode, but this one just really erked me because it was so soapboxy and one sided.

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