100R | Know the Rules

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Brad and Jonathan explain how simply knowing the rules can save you thousands on taxes and college financing, Brad talks through the IRA Conversion Ladder and Capital Gains Harvesting, and a few updates from the community.

  • The financial independence movement is growing, and seeing a lot more press coverage.
  • Messaging matters: The Wall Street Journal published one article with two different headlines.
  • Pursuing financial independence isn’t about buying brown bananas, despite what some media would suggest.
  • Brad reached financial independence with intentionality about his priorities in his life.
  • Brad and Jonathan don’t aim to tell people what decisions to make in their life, just give options and information.
  • What did Brad’s family do to reach financial independence?
    • Housing: chose to move to a less-expensive cost of living area
    • Cars: Brad & his wife drive 15-year-old cars
    • Food: don’t go to restaurants often
  • Set up a life that doesn’t cost that much.
  • Pursuing financial independence actually allows people to pursue jobs that they love.
  • If life costs a lot and someone is in debt, it’s very hard to walk away without taking major risks.
  • Knowing tax rules is a huge component of pursuing financial independence.
  • Knowing the rules in regards to paying for college makes a huge difference in how much financial aid your student might be eligible to receive.
  • A message from Matt about researching the actual requirements necessary for a job in nursing – the cost of nursing school can range from a few thousand dollars to more than $100k.
    • http://www.thernmentor.com/nursing-shortage-fast-pass-middle-class/
  • Studying nursing in a less expensive area still gives you qualifications to practice anywhere in the U.S., with a potentially huge payoff.
  • Roth Conversion Ladder & Capital Gains Harvesting – the goal is to pay little or no tax.
  • Roth IRA Conversion Ladder:
    • Starts with traditional IRA/401k.
    • If you want to retire before 59.5, taking money out is taxable income.
    • If you’re not collecting significant income, taking money from an IRA is unlikely to push you into a high tax bracket.
  • Capital Gains Harvesting
    • If you’re income is low, your tax bracket can be incredibly low.
  • Email from Dan explaining how he and his wife paid off many of their debts, found a way for his wife to be a stay-at-home mom, and started a small side hustle.
  • Brad shares a frugal win of the week at the optometrist.

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.
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