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FI Weekly – April 18, 2023: Expressing Gratitude, The Wealth Letters, 5 Flexible Withdrawal Strategies, The Wealth Letters, 5 Flexible Withdrawal Strategies

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.

Expressing Gratitude

Susanna responded to last week’s newsletter with a story that I wanted to share with you, as it highlights the power of FI and is a reminder to thank those people in your life who have made an impact on you. 

Here it is in Susanna’s words:

“I learned about the FIRE movement in the summer of 2021 when I was very busy taking care of my mother who was dying of Stage 4 cancer.

I was burnt out from caregiving and had to force myself to do the calculations to figure out my yearly expenses and how long it would take for me to reach my FIRE number. I was surprised to find out I only had two and a half more years until reaching my FIRE number.

I asked my mom how long she thought it would take me to be able to retire early and she said 5 years. I said, “No Mom thanks to all of the lessons you shared with me about for frugality, investments, traveling on the cheap, bringing food with me on trips, buying standing room tickets instead of normal tickets for the ballet, opera etc, I can retire in half that amount of time!”

She smiled at me. I hug her and kissed her and thanked her for everything she had taught me. She died a week later.

As I write this, there are tears in my eyes because I can’t think of a better sending off gift I could have given to my mother before her death. She knew that I would be safe financially. I can retire before I turn 50.

At that age, my parents had only been in the US for less than 8 years and had to take jobs that they hated to raise their children. I may lose my job this year due to all the layoffs, but I’ll be fine financially.

At my age, a layoff for my parents would have been was devastating because they had little money and they had to raise two children. But thanks to everything that I learned from my parents and the tips that I’ve learned from the FIRE community, I will be comfortable financially.

This comfort and peace of mind is priceless.

I share this to remind people to take time to thank those people who have modeled behavior that you are copying or have taught you important lessons about investing, budgeting, negotiation etc. It might be a neighbor, coworker or even somebody who made an offhand comment about where to find good interest rates on CDs or how to save money on a vacation etc.

You will never know how important it is for that person to hear how their knowledge and behavior has impacted your life positively until you thank them. It may be the best thing for that person to hear, especially at the end of their life.”

The Wealth Letters

Jordan is a member of our community who created the excellent website The Wealth Letters where he:

“Started a project for my two young daughters called The Wealth Letters, where I am collecting insights from people of all walks of life (the everyday unknowns to the Titans of success) on pursuing wealth, wisdom, and purpose.”

Jordan put together a great thread on Twitter about Morgan Housel and the letter Morgan wrote to his daughter in 2020 sharing 9 essential lessons on money and life.

It is well worth the read for all the specific detail Jordan summarizes, but to whet your appetite, here are 3 of my favorites:

  • It’s okay to change your mind
  • Success doesn’t always come from big actions
  • Don’t underestimate the role of chance in life

Five Flexible Withdrawal Strategies Reviewed

Morningstar just published a detailed analysis of safe withdrawal rate (SWR) options entitled, “When It Comes to Retirement Spending, Flexibility Pays” where they review five ‘flexible strategy’ options and how it would impact your SWR upon reaching FI.

This article is well worth diving into as it gives you options to consider where you can build in some flexibility and potentially increase your SWR from roughly 3.5%-3.8% in their ‘base case’ fixed withdrawal percentage up to 4.4% in their ‘RMD’ scenario and up to 5.5% in their ‘guardrails’ scenario.

Many in our community have a slight discomfort with the standard fixed SWR concept, so I think seeing these different options, how you’d implement them, and the added flexibility and potentially increased SWRs will be really interesting.

ChooseFI Community Taking Action This Week

  • Michael said, “I spent a few hours this weekend revamping my own personal and professional cybersecurity after listening to episode 397. I signed up for 1password and changed all of my logins and got a few Yubikeys to serve as redundant MFA tokens for all of my most critical accounts. I’m embarrassed to admit that one of my bank accounts had a very weak password for over 10 years and I’m quite fortunate that it was never compromised in all that time. I travel very light as a digital nomad for a few months per year and I realized that the consequences of me losing my phone while abroad would be a trip-ender since that is my only MFA authentication device for my job. That is now no longer true now that I have a few fully configured redundant Yubikeys.”
  • Erik said, “My 1% better is finally getting my student loans (from graduating in 2000) forgiven with the recent change in the PSLF program. Working through all the paperwork when the temporary waiver was open through October of last year was worth the effort and I had approximately $18K of my remaining student loans forgiven. Now the only debt I have left is my mortgage! Thanks to my then new girlfriend in 2020 and now fiancée for turning me toward ChooseFI and the FI community and thanks to you and the whole ChooseFI family for being a constant source of inspiration and information. The last three years have truly changed the trajectory of my life.”
  • Pam said, “I got my first travel rewards credit card! One of my largest expenses each month is groceries but the regional grocery store I go to only takes cash or debit card. I went online and found out I could purchase a gift card for the store, and recharge it, online with a credit card! A bit of a workaround, but now I can earn more travel rewards paying for groceries with a gift card I purchased with my credit card. Woot woot!”
  • Ben said, “My 1% better this week has been towards helping others by sharing resources about index investing, including JL Collins’ stock market meditation, and introducing a coworker who just turned 20 to the concept of compound interest and investment.”
  • Shannon said, “My 1% this week was paying off our car loan! We bought a used car last year after ours was finally too old and tired to go on, and were able to pay off a 5-year loan in about 8 months. We want to be debt free by the end of 2023, and now all we have left are my student loans!”
  • Manuel said, “My 1% better, I saved over $1,000 with policygenius on my annual home and Auto bundle premiums.
  • Gavin said, “Planning out my day the evening before or in the morning using my calendar– I’m using time blocking and this has been a great boost to effectiveness.”

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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. American Express is a ChooseFI advertiser. Disclosures.
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