016R | Friends of the Library

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1500 days
In Today’s Podcast we cover:

  • Friday Roundup #5
  • Recap of house hacking episode with Chad Carson from CoachCarson.com
  • Real estate investing is one of the pillars of Financial Independence
  • ‘Keep it super simple and try to do the fundamentals well’ quote by Chad
  • Chad put in the extra effort to walk neighborhoods on Saturday mornings to learn about real estate
  • House hacking is essential knowledge for someone getting started with FI
  • The main levers to pull to get on the path to financial independence
  • Housing is the biggest line item in most budgets and this can be a game changer
  • House hacking for ‘2nd generation FIRE’
  • Brad lived at home after college graduation and saved many thousands of dollars instead of renting an apartment
  • If you have a solid income and you aren’t saving money then you aren’t a “success”
  • Moving forward ChooseFI will bring in other real estate mentors to help educate all of us
  • Itunes reviews
  • Feedback from Libertarian Investments about our appearance on Radical Personal Finance on earning more than $100,000 income and how it makes paying down debt much easier
  • Can you earn $100,000 a year without going to college? That wasn’t what we were arguing on Radical Personal Finance
  • Unconventional choices: Brad and his wife Laura decided to pick up their entire lives and move 400 miles south to Richmond, VA. This was a long-term play to afford the FI lifestyle on one income.
  • Message from Ken on the benefits of libraries and the assortment of ways you can get value out of your local library. He also thought the 10 year timeline to reach FI was unrealistic
  • We agreed and thought 10-15 years is much more realistic. And even if people take 20-25 years it is still a huge win over where they would have been otherwise
  • Debt-free isn’t the goal – it is financial independence
  • Comment from Tallis on how the podcast has been “life changing” for them. They already put a plan on paper for early retirement!
  • Feedback from Isaac that the Roth IRA is the “worst” investment vehicle and we’re going to unpack this in the future
  • Jonah said dollar cost averaging provides far below average market return. While we agree mathematically, it is still difficult psychologically for people to dump a bunch of money into the market at one time
  • Travel rewards question from Ben on the timing of the Southwest Companion Pass
  • Travel rewards question about hotel rewards and how to maximize Hyatt and Starwood
  • Episode 17 coming up: Behind the scenes look at the Mad Fientist

Links from the show:

3 thoughts on “016R | Friends of the Library

  1. Go Curry Cracker conveniently ignores state taxes because he’s an ex-pat. For the vast majority of Americans state taxes is a significant factor. When people live in a state with an income tax, it reduces the amount of money that can be converted tax free from traditional to Roth. It also means a tax is paid on long term capital gains, meaning that tax gain harvesting is rarely worthwhile, and not as advantageous as he describes for living off of.

  2. I think, over time you got to address the question of how people should laid out their cash flow looking that you guys are ok with real estate (which is active management) and vanguard funds.

    People that are starting off don’t have the cash flow to devote into 2, so which is which, to contribute and maxed out the locked retirement account such as IRA, 401k, or to carry this in accounts that could be easily unlocked?

    There is also a question on efforts since a newbie needs to learn 2 things.

    I listened and seen many FI bloggers and podcasters started off recommending index funds, or robo advisers and then pivot to real estate. People can change when they see a better wealth machine available to them, however newbies would get confused as well.

    So what, at a high level are the core determinants of which method to take, a passive approach and sticking your neck and say you cannot beat the market or being an entrepreneur and hustle to do both (on top of your day job, where you are also chasing for higher income, and your family)

    With regards to the questions on the minimum income required, Joshua Sheats in his recent podcast on Mustachian refers that the FI target audience is high income earners and teaching them to manage their lifestyle perspective better.

    I agree.

    No matter what you do, its difficult to convinced people making $25,000/yr they can FI in 15 years. The people that will listen to you are folks with a min income of perhaps $70,000 for a single person or a combined $100,000/yr. Those are the parameters that they can work with.

    While you would like to reach to people to help them upgrade their life, FI is a concept not on their mind, because when you are earning $25k or below, there are other priorities and you would be searching for those.

    Hence in his recent survey the crowd that listens to Joshua Sheats is like your crowd, people with the means to get there or has gotten there and like this kind of financial porn (sorry for the crude word). The ones who will benefit won’t look this up, or sadly its hard to expose to this.

    You also need a certain academic competency to understand why these math make sense. There are even university degree holders who are not good with maths that failed to see how this will work out. All this points to a very target audience.

    I have problems with this on my blog as well. Those who need the info problem wont be reading them.

    Cheerts

  3. I was just talking to a coworker about how there are some truck drivers who earn a 6 figure income. Its uncommon but it is possible and doesn’t require a degree, lots of training but training you almost always get paid while doing.

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