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FI Weekly – August 2, 2022: FI Family Taking Action, The Munger Mentality, Community Wins

FI Family Taking Action

I genuinely love reading each and every response I get to this FI Weekly newsletter, so please keep hitting reply and passing along your wins and ‘1% better’ changes!

In that spirit, I wanted to pass along an incredible email that David wrote in:

“Hey Brad – I don’t think I’m overstating it when I say that you guys have altered the trajectory of my life. That’s not to say that it was negative before finding ChooseFI. Just that it was uninspired.

ChooseFI helped me put perspective on my life’s purpose and, somewhat paradoxically, has created a mindset that has me striving for more work. The kicker is that the work I’m striving for is different than the work I’m currently doing.

I found a true passion for personal finance through your podcast and have been learning everything I can about buy and hold investing strategies, tax optimization, and the nuances involved in each individual’s path.

I wanted to reach out to show you exactly what your message of “take action” motivated me to do. Here’s a list of the changes I’ve made since December of 2021 when I found the podcast and online community:

  • Switched our phone carrier to Mint Mobile – cutting our monthly phone bill by $130 per month.
  • Switched our car and homeowners insurance saving a total of just under $1,000 per year.
  • My wife and I have always been debt averse so the only debt we have is our mortgage. We took a hard look at investing vs. paying off the mortgage and determined that the peace of mind that would come with getting out of debt totally is something that is very important to us. So, everything outside of the investments outlined below is being put toward our mortgage principle with the conservative projection of being completely debt-free by mid-2023. If we do that, it’ll be $265k paid off in 5 years.
  • We have constant communication on what we’re spending money on and how it’s contributing to our overall happiness.
  • I increased my traditional 401k contribution so that it’ll be maxed out this year and every year going forward while I’m still working.
  • I set up recurring investments into my taxable brokerage account.
  • Set up 529s for my two daughters who are 3 and 1. We’re not investing a ton in these because of some of the unknowns but we figure there’ll be a way to utilize the funds even if it’s not the traditional college route.
  • I started a blog called RunnersFI. It was actually my journey to becoming a runner and slowly losing weight (from 280 lbs in early 2020 to 190 lbs today) that helped me get on board with the slow and steady approach to investing.
  • One of my recent blog posts 95 Must Read Articles of FI provides a list of all of the articles your guests mentioned in the hot seat as the answer to the “What’s your favorite article?” question.
  • I am helping family members wrap their heads around their personal finances and hope to set all of my nieces and nephews (who are all in their late teens/early 20s) up with the knowledge that I didn’t have at their age.
  • We have open communication with our 3 year old about money. Nothing major at this age but we are starting to lay the foundation for allowing her to have a good financial “ground game” as Jonathan referred to it in the early days of the podcast. We will do the same for our younger daughter when she starts to show interest.

This list doesn’t come close to being comprehensive but it gives you an idea of what our family has been able to do in a short period of time. “

The Munger Mentality

It’s no secret that I think Charlie Munger, the vice chairman of Berkshire Hathaway, is one of the most brilliant humans on the planet.

Warren Buffett describes Charlie as having “the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you even finish the sentence.”

His focus on mental models is legendary, and I came across this Twitter from Clint Murphy that is well worth your time to read:

11 tendencies Charlie says we should all understand to help us…remove ignorance and make fewer mistakes.”


ChooseFI Community Taking Action This Week

  • Brandie said, “This week I opened Roth IRA accounts for my 2 year old and 10 month old with $375 each! My small business paid them for their modeling services. (I teach infant swim lessons). Even if there is never another contribution, that $375 will be over $35,000 at 8% growth in 59 years when they can withdraw without penalty! I’ve been waiting to do this for a long time after learning about this hack on Choose FI!”
  • Sherri said, “My 1% better this week is that my husband and I set up a Fidelity brokerage account, which we call our swear jar. When something at work makes us swear, we are going to throw an extra $5, $25, or whatever into this account, just to make us feel that we are a smidge closer to FI. We have Vanguard IRAs/Roth IRAs, but we max these out early each year. We put money into our 401k and 403b monthly, but we do not have the ability to throw an extra $100 into these work-managed accounts on random stressful days. Instead of embracing retail therapy to deal with work life’s annoyances, we are going to treat ourselves by saving even more because we swear we will one day escape the rat race. (We are both 50+ and are counting down to retirement.) We think our swear jar brokerage account idea is pretty funny. Therefore, in addition to benefiting from the extra savings, we are benefiting from our stress-reducing laughter!”
  • Bryan said, “I have a win to share! Inspired by all the salary negotiation talk I’ve heard on ChooseFI, I made sure to actually discuss my raise this year with my manager rather than just having him tell me what I was getting. All I did was lay out all the ways I’ve added value to the company over the past year and gave a range of where I thought my salary should be based on my contributions and the market. It took about a month of uncomfortable “hey, are you still looking into my salary?” emails, but he finally got back to me this week saying I’ll be getting an 11.5% raise instead of the usual 3.5%! It was worth the few uncomfortable communications to get that extra salary bump! And I owe it all to ChooseFI for giving me the tools to get it done!”
  • Emily said, “My 1% better saved me thousands of dollars on my taxes! I received a $3,000 New York State tax bill comprised of over 50% penalties and interest. I never even considered asking the state to forgive the penalties and interest until I heard this idea on your show. I wrote the letter detailing my honest mistake which led to the penalties and interest and I asked them to forgive the same. To my pleasant surprise, they quickly reissued a new bill in the amount of $1,400 with all penalties and interest waived. thank you so much!”
  • Mel said, “I’m so excited to share our 1% this week is that we paid off my car early! Now both cars are free/clear (2008 Honda Ridgeline and 2017 Volkswagen Passat) and our sites are set on tackling the mortgage. We have been paying off an additional lump sum of at least $12,000/annually for the past two years. Now we can jump to $16k and further accelerate FIRE.”

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