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Beginning of a New Era | EP 285

What You’ll Get Out Of Today’s Show

  • 2021 kicks off the fifth year of the ChooseFI podcast. Despite being at different points in their own financial journeys, Brad and Jonathan have experienced the benefit of incremental growth with both their finances and self-improvement. While it may seem simple and even mediocre, they are living amazing lives.
  • You need to control what you can control, starting from wherever you are. If you can optimize at the margins, you can reclaim decades of your life.
  • It’s not just the ChooseFI podcast trying to share this message and concepts. The entire community is working to share this message.
  • In a Facebook post from Jessica, she shares that her goal at the age of 19 was to save $5,000 so that she could feel stable. She began finally saving at the age of 26. By spending less and earning more, five years later, she hit the net worth milestone of $100,000.
  • The concepts ChooseFI presents are not new. The show brings information together to tell a story to motivate and encourage people to take action with it.
  • Don’t just do what people tell you to do. Look at what they are doing. JL Collins’ blog series, The Stock Series, started out as a way to document what he wanted to teach his daughter about investing. Warren Buffett plans ate leave 90% of his investments in a low-cost index fund.
  • What is impressive about index fund investing is that there is ample evidence that over the long-term, this simple plan outperforms other strategies.
  • Index funds, like total stock market index funds, are self-cleansing. Rather than trying to pick the winners or attempting to build your own index where you need to stay abreast of what’s happening in the market, your ownership in companies performing poorly automatically decreases as a percentage with an index fund.
  • To illustrate this point, of the original companies making up the DOW in the early 1900s, none of them remain within it today. With an index fund, you end up buying the up and coming companies that are replacing those losing value without having to do any research.
  • It’s an odd phenomenon that people do not like to buy stock when the market is down. There are drops of 10% just about every year, 30% every few years, and black swan events like 2020 are more common than we like to believe. Despite of the ups and downs, stay the course and keep investing.
  • US currency is backed by the confidence of the federal government. As much as a large percentage of the world also has confidence in our government, $100 today is not worth the same as it was a hundred years ago.
  • Not only has inflation eroded the value, but more money has been printed than 100 years ago. Whenever the government prints more money or injects a stimulus, our money is worth a little bit less.
  • What is the value of cryptocurrencies, like Bitcoin? They are speculative. You buy now and hope later someone else will pay more for it. Brad has sworn off speculative purchases after a horrible real estate investment years ago, but as a life-long learner, he has a remote interest in it.
  • Warren Buffett has described Bitcoin as “rat poison squared” because, like gold, it doesn’t produce anything. Investing in it is speculative.
  • Moving money back and forth for 5 billion people in the world is both difficult and expensive. People without real access to the world economy can use Bitcoin to meet their needs.
  • There are thousands of different cryptocurrencies available and most of them may disappear at some point. Their value is volatile and utility limited. It’s also subject to manipulation and is currently unregulated, but we’ll keep hearing more about digital currencies.
  • The future is going to change, so Brad is always willing to learn.
  • Since it’s the first episode of the new year, what can you do to make your life just a little bit better? Increase your contributions to your 401K by 1%. Look for investment options with the lowest fees and think about moving them over. Cut an expense you aren’t getting value from. Max out your HSA account. Contribute to your 2021 IRAs and other retirement investment accounts. Use Trim to help you lower your recurring bills.
  • If you are looking for a new career, train for a new SalesForce position earning $65-80,000 a year with the course Jonathan and Bradley Rice created. The five-day SalesForce Challenge with Talent Stacker is free.

Resources Mentioned In Today’s Conversation

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. American Express is a ChooseFI advertiser. Disclosures.
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