Join The Rebellion

Join The Rebellion | Ep 204

In Today's Episode

What You'll Get Out Of Today's Show

  • The Rebellion is Here! Rebel Entrepreneur Podcast is live and available anywhere you can listen to podcasts. Head to choosefi.com/rebel to get early access to all the episodes for Season 1.
  • The long-awaited Barrett Family Recipes are available. Head to choosefi.com/meals to look at each recipe. Or if you want to download and print the collection, you can opt-in on that page. We'll also send you updates as more recipes are added.
  • Contribute your won recipes to our community on the ChooseFI Recipes and Meals Facebook Group. https://www.facebook.com/groups/ChooseFIRecipes.
  • Creative Mother's Day Gifts. Jonathan went for the low cost but extremely valuable gift of compiling family photos for his wife, Dani. Brad went for the novel and entertaining, Cameo.com to surprise Laura with a message from her favorite Mets Player. Sometimes you've got to think outside the box.
  • What if everyone pursued FI, how would that mirror the world we are living in now? Anne-Marie wrote in with this question and the guys discussed what a world of FI would look like if we all spent according to our needs and priorities instead of our wants.
  • What is the future of college in a post COVID world? In discussing a world where everyone cut discretionary spending, college seems like a big expense right now. With many student losing “the college experience” this term, was it worth the high cost to take courses online at home? Couldn't a Coursera or another MOOC (Massively Open Online Course) fill the same need? The guys discuss this topic.

Related: Rebel Entrepreneur with Alan Donegan | Ep 195

Resources Mentioned In Today's Conversation

If You Want To Support ChooseFI:

Transcript 

 

Jonathan: Delivering on promises, thoughtful gifts for Mother's Day and the rebellion is here. Welcome to the ultimate crowdsource personal finance show. This is ChooseFI.

Speaker 2: You are listening to Choose FI Radio. The blueprint for financial independence lives here. If you're looking to unlock the secrets to financial independence and early retirement, you're in the right place. Stay tuned and join a community of like-minded people who are getting all things and taking control of their lives in the pursuit of financial independence. ChooseFI, your home for financial independence online.

Jonathan: Right. Lots to hop into today and I guess Brad, let's start with promises delivered. I know for weeks if not months, we've talked about the Barrett Top 50 and this of course is alluding to the recipes that you and Laura have been curating over the last four or five years. We have something for the audience that we're going to announce right after this.

New Speaker: So Brad, give our audience the update, the Barrett Top 50 recipes. What do you have for us?

Brad: Yeah, weeks, if not months, if not years is much more like and probably three years in the making. Yeah, we have long talked about, one of the ways that we save money really most significantly in my house is through cooking in a really smart and efficient way. This is not like making hot dogs and pasta, this is cooking delicious home cooked kind of gourmet meals but things that are really pretty easy to make in the grand scheme of things, and my wife Laura and I have been cultivating this mythical top 50 list, we've called it. Yeah, I mean Laura has really put together... I think she has now 30 of them uploaded and she is furiously working on the remaining 20 and our team has turned this into something truly, truly remarkable. We have a cookbook that you can download and individual recipes are available on the website.

Jonathan: For free?

Brad: It's amazing. For free. Entirely for free. So yeah, I mean, Jonathan, you saw this page. It's crazy, right?

Jonathan: It's one of the best pages on ChooseFI right now. I mean, it's amazing. So, let's talk about the power of getting your grocery budget under control. We have a lot more to cover here, we're not going to spend all day here, just go to choosefi.com/meals to go check it out. Don't take my word for it. It will deliver. You will be impressed. But let's talk about the economics of you going to choosefi.com/meals, let's talk about the power of anchoring yourself to $2 per person per meal. Brad, take it away.

Brad: Yeah, so it's funny, we use that phrase all the time and I think somebody new is like, what are these guys talking about? But, I mean that is basically $2 per person for each of our dinners. That's how we conceptualize what we spend. Now, so contrast that with going out to eat right, an entree 10, 12, 15 bucks, whatever it is, you get a drink, you have maybe an appetizer, I don't know what people do plus tax and tip you're at $30.

Jonathan: I mean, $13 to $14 per person per meal is the cost efficient fast service, service with a smile food, right?

Brad: Yeah. I guess I'm a little antiquated so yeah, it's probably more than that. But let's even... even if we say $20 to $30 a person, right? Which after tax and tip and getting drinks, I mean, you're in that ballpark pretty easily. So for us, we like to really just win at this game of life by not sacrificing and if anything, getting better quality just in everything we do, but just thinking a little bit differently. So Laura loves to cook and she loves to find recipes that are pretty easy, that aren't requiring 50 different random ingredients that she's going to have to buy for each recipe, things that she can use over and over again and things that she can make meals and double or triple them so she only has to cook one time that week and that'll make three dinners for each of us, right?

Brad: So it's efficient in every way. It's sufficient in terms of dollars because you're not buying new ingredients, you're able to use multiple ingredients. She'll cook two complimentary meals in a week where if we need Greek yogurt for some type of recipes, she'll find the other recipe that needs Greek yogurt that week to cook as well. So we're not throwing out half of a jar of it, right? So it's efficient in that sense. It's clearly efficient in terms of time. Honestly, Jonathan, one of the biggest things is the health benefits. Just cooking in your house, you know what's going into it. Frankly, like for us, portion control is a big aspect of this too, because we don't want to blow up the food budget. I could eat an almost indefinite amount of food, it's utterly absurd but if I know that Laura has this one vat of food that is for two nights, I'm not going to eat like a crazy person like I probably would if I was left to my own devices here.

Brad: So yeah, I mean this is how we think about it. So, Laura, whenever she's looking for new recipes, I mean, the biggest thing is, is this going to be something that's delicious, right? We're not trying to sacrifice that in any way. We're looking for, as we call them in our house, A plus meals. That's ultimately... to get in the top 50 list, it's got to be an A plus. So, I mean she makes plenty of meals that she has high hopes for and they're like a B plus or something and it's delicious, we eat it but it's never going to make it into this kind of mythical top 50. So, it's always this-

Jonathan: The mythical top 50. That's the best part.

Brad: But yeah, I mean it's funny because it has for a long time been something that was mythical because we didn't exactly have it on paper but yeah, I mean it's kind of cool that this is now existing in the world. The funniest thing, just to finish up this little conversation here is, Laura saw the recipe book and she couldn't believe that it was her recipe book. She's like, "This looks amazing. I can't believe it." The team took her basically scanned PDFs that she had written on and talked about dollars per meal and any ingredient changes or cooking changes that she'd made and they turned it into something just top notch. So yeah, I mean I really... just for anybody out there who's looking for easy, delicious meals that you can double or triple, we've got this free cookbook for you. So like Jonathan said, head over to choosefi.com/meals.

Jonathan: So, I've actually got it pulled it up here for those of you that are watching this on YouTube, all the recipes are right there available. Then Brad, walk us through if someone wants to get the... it's also available as a digital... actually let me send this to you MK, it's also available as a digital download, is that correct?

MK: Correct. Correct. So, as you can see on the website right now off to the right hand side, you can just get the download so that way you can print it, maybe you don't want to have to keep going back to your phone or your computer when you may be have flour or grease or something on your hands so you can print it out and actually make your own notes on it as well. If you do the digital download so you just put in your email address and we'll send it to you. When more recipes come in, we can send you updates. If you're sitting here thinking, well I have recipes, well you should head over to the Recipes and Meals ChooseFI Facebook page because there are always great delicious recipes being shared. With the latest crisis, I actually just went through... there was a bread thread and people were just sending photos of the bread that they made and it was deeply satisfying just to see all the different kinds of bread and the recipes being shared for bread. So if you would like to cook, you should definitely check that out too.

Jonathan: I would imagine that the Facebook group on Meals and Recipes, there's a strong bias towards meals that are generally in the ballpark of $2 per person per meal, right? I mean that's probably going to be a theme, maybe not exact or to the dollar, to the penny but there would be a bias towards more frugal alternatives, right?

MK: Absolutely, absolutely. Great recipes being shared. Great hacks of, okay, well you can substitute this for maybe something less expensive and just so many delicious photos.

Jonathan: Brad, any chance we could actually get these turned into YouTube instructional videos, something along the lines of... is that next? I feel like Laura is increasingly game to this idea, let's get these out into the universe.

Brad: Yeah, I will ask her, I don't want to spring this on her certainly then she'll hear it on Friday, obviously but yeah, we are doing more of these live events. So yeah, that would be pretty cool to just get an insight right into how Laura thinks about this. We could have a happy hour with the Barrett's and while she's cooking that could be pretty cool.

Jonathan: I like that. No, in fact, you could even do a webinar. So let's say someone has done these, they have questions about... here's what I think that Laura does that you woven in there, but I don't think individuals appreciate how strategic and awesome this is. It goes to the fact that how do you not end up with a year supply of one ingredient and constantly out of the other that's forcing you to go back to the grocery store time and time again for these one or two struggler ingredients. What Laura does is she looks for the combinations, right? The way she aggregates these meals together allows her to let these ingredients actually go farther. I know I'm a huge fan, I love America's Test Kitchen. I love America's Test Kitchen. I watch a lot of those shows. It's on PBS and it's just a fantastic cooking show, but they are forever sending me for this one crazy random ingredient that I will never use again over and over again.

Jonathan: I made a dish with saffron the other day. Now, saffron is amazing. I don't want to look at the price per ounce, but that's the first time in my life that I've ever made something with saffron. I don't know if... it will probably be years before I have another meal that includes saffron, like economies of scale when you're doing this and being strategic economies of scale and someone that thinks about how this is going to affect your budget, it's a really important scope. I mean, there's some ingredients that you're going to be able to double down on. You're going to love them, but having that framework in mind is really important.

Jonathan: All right. So real quick, I want to... I think it's timely, so real quick, timeliness for those of you that are listening to this episode when it goes live, we have Mother's Day coming up in just a couple of days here and a lot of mothers out there and a lot of appreciative sons and daughters. So Brad, I am going to share with you what I am doing for Danny ahead of time here, but first I'll send it over to you. What's going on in the Barrett playbook?

Brad: Yeah, Jonathan so this year for Mother's Day, I did something kind of interesting. There's this cool new website that I came across and so I was so excited about this that I already ruined the surprise, I already gave it to Laura.

Jonathan: Oh, aren't you proud of yourself.

Brad: Oh, God. Yeah, I cannot... I really can't hold back. So anyway, there's a website called cameo.com. Have you heard about this by chance?

Jonathan: Never. No.

Brad: Okay. I hadn't either. A buddy of mine just had a birthday and some friends of his got him this Cameo and it was absolutely wild. So basically it's tons of famous people on this website so athletes, musicians actors, et cetera. They literally can make a personalized message for you. So, no joke like my buddy, this is going to sound crazy but back in the day he was a fan of 90210. So his friends got him to... he's going to be mortified when he hears this but got in to get Tory Spelling to record him a personalized message as if she was, I don't know what the character, Donna Martin or something like that. It was hilarious, he showed it to me. So I'm like, all right, I've got to get Laura a Mother's Day message from... she's a huge lifelong New York Mets fan. So I'm like, all right, let me go on, let me see if there are any athletes. It wound up there were a bunch. There was one guy who she used to like back in the day named Endy Chavez. He's this obscure baseball player. But he-

Jonathan: Not anymore.

Brad: ... is on this cameo.

Jonathan: No, I'm just kidding.

Brad: What's that?

Jonathan: I said not anymore.

Brad: Yeah. You're welcome Endy. But no seriously $30 and he recorded this personalized Mother's Day message for Laura, to Laura with details about her that I wrote in the notes, et cetera. Again, this is not an advertisement for Cameo because I just found it a couple of days ago, but it is so much fun to just mess around through this website and see who you can get to send messages to you. So, clearly $30 is not going to break the bank. The smile and joy that she got out of this was well, well, well worth the 30 bucks and I didn't have to leave the house to go to a store and it was a win all around.

Jonathan: Nice. All right so that's pretty cool. I like it. I like it. So mine is... so here's what I have, I have several mothers that we're preparing for for mother's day. So what I've been doing in the last two to three weeks is I went through the last two years or year and a half of Google photos and let me tell you, this is not easy. I have 18 pictures of my entire childhood like total. My son has 18 pictures a day, my daughter has 20 to 30 pictures a day starting on August, like whenever... on her birthday moving forward. I worked on it for hours and I was suddenly into September of 2019 and I was like, you've got to be kidding me.

Jonathan: So I'm going through Google photos and I'm aggregating the best of, right? Putting those together in a shared album and then turning that into a slideshow that has to be ready by this weekend and I only have four months to go through at a hundred somewhat pictures. I only have four months left that I need to cover at an average of 18 to 19 pictures a day. So I'll be done, no problem. That's not a large time commitment at all. But once I curate the list, then I can make a semi unique slideshow presentation with music to match for my mom, my wife and my mother-in-law and it's cool and post these kind of stay as archival entities than instead of me going through, again thousands of pictures, we just have these pictures to represent our year in review and a free frugal alternative there not as cool as Endy Chavez who's just become world famous, thanks to this pod but I know my wife is appreciative nonetheless.

Brad: That is really cool.

Jonathan: So yeah, maybe for those of you that are limited to the iPhone ecosystem with your mere five gigabytes of photo data, you won't have the picture problem that I do but, yeah. All right dude. Well, next I wanted to talk about the rebellion. The rebellion is here as of May 4th and Alan Donegan, our good buddy Allen Donegan, who's a friend of the show has been on this podcast many, many times, his brand new show, Rebel Entrepreneur is the next podcast in the ChooseFI family of podcasts. It launched on Monday. I'm telling you, I promise you not hyperbole having listened to the episodes, it is a game changer. It is so long overdue. It is probably one of the most valuable podcasts in existence right now. I'm so excited to say that it's under the... it's being produced with the ChooseFI family of podcast.

Brad: Yeah. I don't think it's hyperbole to say that yeah, I mean, his ideas can change the world. They genuinely can. I mean, especially in this time of economic uncertainty, people need to think a little bit differently, right? They need to start thinking and looking for opportunities. I think you've seen so many historical examples of amazing businesses that were created out of recessions and why can't you be the next person, right? You just need to think a little bit differently and Alan does that to such an amazing level where he's thinking about businesses, not in terms of the old stodgy business plans and raising money and having to dot all the I's and cross all the T's, he's talking about how can you get something up and running fairly quickly? How can you sell? How can you pre-sell before you've invested all that money.

Brad: The proof is in the pudding, whenever you ask your friends and family, "Oh, is this a good idea?" And they're like, oh, it's amazing. I'd love it. That's wonderful, yada, yada, yada and then, but would you buy, right? That's the real question. But would you take out your wallet and buy it? I think Alan's retake on that is just... it's a true, true game changer. I mean Jonathan, we've seen the effort that he puts into even just sending us an email for ideas for the next time he's going to be on our podcast. I mean we're blown away. We don't do anywhere near that kind of prep for our own podcasts and I mean, Alan's doing that every single time he gets in touch with us.

Jonathan: Are you implying that we wing it? Is that what you are implying?

Brad: Maybe. Maybe. Well, thanks to MK we don't anymore but-

Jonathan: Thank you MK.

Brad: But yeah, I mean this is going to be a top, top notch podcast.

Jonathan: Yeah. For anybody listening to this, you're listening to a podcast right now. So just in your podcast player of choice, it's available on all podcast players including Spotify, Apple, Android, you'll be able to find it. Just search for Rebel Entrepreneur. Now, if for any reason you're getting hung up, it's not working and really honestly, or you just want to binge listen, then go to our website, go to ChooseFI.com/rebel. The first season is there with familiar face, Alan interviewed me for the first episode but, many of you are familiar with my story. It's kind of an interesting take, it's looking at it from the perspective of the fear of failure. I was never going to be an entrepreneur. I was never going to... I wasn't going to do it. Alan, we pulled back the curtain and looked at the practicalities of that choice and how to de risk that proposal because I love the benefits of entrepreneurship, I just was afraid of... I had the fear of failure early on.

Jonathan: But if you want to listen to the entire season ahead of time, go to choosefi.com/rebel. For subscribers, he's actually put... binge listen, if you want to binge listen the season, for subscribers, he's making the whole season available and you'll be able to actually access the entire season. Honestly, this is a master class. You need to understand what you're talking about here. This is a master class on entrepreneurship. Entrepreneurship is a series of skills that stack on top of each other to allow you to have your cake and eat it too, to design a future you can get excited about not in the distant future but now. He de risk it by helping you think of creative ways to do it without going into debt.

Jonathan: Episode titles include Fear: What stops you from starting up? Episode two, Five ways to start a business with no debt. Episode three was examples of entrepreneurship case studies. Then moving on, The Great Passion Myth. Do you need passion to start a business? The unexpected power of many experiments. He does a coaching series. Listen, Alan has been... his business, the popup business school has carried him around the world where he's been able to not only inspire thousands, if not tens of thousands of entrepreneurs, but he's actually, along with that, been able to aggregate case studies of people that have pursued entrepreneurship and done it from various obstacles, various challenges that kept them from doing this, this aggregation, the synthesis of those ideas are all coming to you in the form of this podcast, The Rebel Entrepreneur, the magic of using customer's money to do a startup, ideas and creativity, free flowing business ideas.

Jonathan: I listened to that episode, Brad, not hyperbole changed my life, changed the way I look at creativity generally and I see some of the themes on how you and I personally pursue our creativity, personally, the ideas that we've had that have really taken off. If you listen to that episode, you're going to pick up on those key elements. This is a master class in entrepreneurship and it is entirely free and when you join the rebellion, when you subscribe to this podcast, what you're saying is, I'm open and willing to learn a new skill set and I trust that Alan is the person that can help me, guide me here. What Alan's doing with the show much in the way that ChooseFI, this podcast is crowdsourced, Alan's goal is to see you succeed, to highlight your stories, to give you the information that you need and take whatever challenges you're working through and use that to foster ongoing conversation in the show.

Jonathan: If you haven't yet done it this week, I'm giving you one thing to do this week, subscribe to Alan's podcast, you will not regret it, it will not let you down. Go to choosefi.com/rebel. You can binge listen the entire season, share it with your friends and family, but do that this week. Go to choosefi.com/rebel. All right, everyone mailbag Friday, we're going to take a listener question. I believe the frame is what if everyone pursued FIRE and how would that be different than COVID? This is going to be a lot of fun and we'll tackle that question right after this. All right, mailbag Friday. MK, what do you have for us today?

MK: Hey guys. Well, today we have some pretty thought provoking questions so I hope everybody's in a deep philosophical mood on this fun Friday. So the first question comes from Ann Marie and she says, over the years I've seen a few threads on FI sites stating that if everyone followed five principles, the economy would crash. It seems as if we're in a real life scenario of almost all discretionary expenses being on hold due to social distancing guidelines with the foretold economic crash. I think this would make an interesting side topic and you guys are just the ones to sensitively broach it.

Jonathan: I love that she said it through the lens of sensitively because that is it, right? This feels like a hot button topic but Brad, I think we can go through this.

Brad: Yeah. Yeah, I absolutely do. I mean, we're certainly not going to incite any riots here. It's just you and I thinking through if everyone was FI, right? Maybe we're seeing some aspect of that right now, with people not frequenting stores, I mean-

Jonathan: Yeah, I mean to some degree, some variation of this is just inevitable, right? I mean, the old economy versus the new economy, this transition, regardless of how you feel about it, certainly you can notice changes in spending patterns over the decades and it's not that spending is necessarily going less, although that's happening, we're seeing that certainly right now, but the way that people spend is certainly changing.

Jonathan: I think there's several different directions that we should take this. The one is, I think that if every... first of all, we need to acknowledge there's no scenario where everyone is going to pursue FI. It's never going to happen. This is a hypothetical, theoretical example of what it might be and how it might play out and your opinion on this may vary, this just our opinion but no... ChooseFI and other blogs and podcasts in this space, we are fighting an uphill battle. We're getting tiny, tiny percentages of the population that are open to hearing this. There is an entire marketing machine that makes money by people not hearing this, not sharing this, et cetera.

Jonathan: So it will never happen. But you found it and you're benefiting from it. So let's play this out if more people did this. One is, I think Brad, one of the best things that could happen is the shorter... we see the unemployment numbers and we also see how it feels like jobs are kind of disappearing in mass. Wouldn't it be amazing if your working career was actually shortened and you were okay on the other side because you were saving a larger amount, thereby freeing up that job for the next individual that needed it. That's my first thought. How cool would that be if we could glide path our way into unemployment, but that unemployment was by choice because you set aside reserves for yourself when times were good.

Brad: Yeah. That's interesting. I mean, you always talk about like an abbreviated path to FI. This is not get rich quick, it's get rich quick-ish. If you work for 15 years and you save 50% of your income, you're pretty much reliably going to be, if not at financial independence, then pretty darn close. So yeah, I mean maybe we just come up with a new entire conception of what a working career looks like. That's cool.

Jonathan: To be honest with you, this was one of the promises of the industrial revolution and beyond was just that the working timeline was going to be compressed, that automation and everything else was going to reduce the working time. You weren't going to need to work 40 hours a week, you are only going to need to work 30 hours a week or 25 hours a week. What happened to that? That just disappeared, right? Now people are working 60 hours just to be able to pay their bills in some cases.

Jonathan: So yeah, I think that is the one end, I mean, this is... what's cool about this is, and I promise you, we're not going to get to politics here, we're not going to get into... at all, but, on the one end for individuals, if large percentages of the population can create their own basic income from their own work ethic, from their own surplus, they're able to set that aside, that has taken a huge burden off of society as opposed to society needs to provide this week after week, month after month. There's a cost to that. I'm not making a judgment one way or another, but I think objective people can look at it and say, wow, if large swaths of population can create perpetual income for themselves over time, that's good for society on multiple levels.

Brad: Yeah. I think this gets to a question just generally about... that people have been asking about, oh, is the FI community or the FIRE movement going to be decimated by a big drop in the stock market, right? Whenever that happened, obviously it's come back dramatically, but there will be some future drop in the stock market at some point in the next hundred years. My response is always, there's no world where it's bad that people are saving 20, 30, 50, 70% of their income. There's no world where that's a negative thing. There's no world where people having control over their lives and dramatically reduced stress just by sheerly having some money saved up, there's no world where that's a bad thing. So I think to me, that's the starting point of all this.

Brad: To your point, this is clearly just a thought experiment. I mean, Anne Marie asked a great question, but there's no... there's also no world sadly, where 50% of the population is going to pursue FI, right? If in America, if we get to one or 2%, which would be three or six million people that's not too shabby, right? But so clearly this is just a thought experiment, but I mean I think Jonathan, a lot of the things you hear about the economy they're based on growth and I think that's all predicated on just people continuing this what I view as like insane spending, right? Spending up into every dollar they have if not more, going into debt. Again, it's like this engine of just growth upon growth upon growth as opposed to sustainability.

Brad: Again, I don't mean that in any type of loaded way, I just mean it in terms of, a business can be stable and provide income for its owners and its employees without growth. You can just look at numbers and say, this makes sense, this produces a profit. We don't need growth. We've just diluted ourselves into saying that the only success, the only metric for success is growth, therefore, if we don't grow then it is not successful. So I think it's just... it's just changing the bar. Jonathan, a book that we read recently is called the Infinite Game by Simon Sinek and I think that's where I'm conceptualizing this. I don't think he used growth in there at all, but it's kind of a sidebar but it's just looking at decisions being made for the longterm.

Brad: I think that's what the FI community does and I think that's what when you have this infinite mindset as opposed to how can we get growth in whatever way in terms of stock price or let's hit this arbitrary target or let's do some other random thing that we've made up. We're thinking in terms of short term and I don't like that at all. I don't like short-termism. I think we should be thinking in terms of you and I always say 30 to 50 years, I think that's how I look at like a FI kind of time period. Certainly not... I don't care what a company did in the last quarter, but I do care if their mindset is only based on quarterly results as opposed to contrasting it with a Berkshire Hathaway, for instance, run by Warren Buffett and Charlie Munger, who they think more along the terms of, how can we create successful businesses that as they say, have moats around them, that have a sustainability to them that hopefully will last for decades if not more. I just like that thought process.

Jonathan: Yeah, I mean that's interesting. So the next part, I want to talk about the growth and I love that you woven the Infinite Game because I think it gives us a lexicon of language to use when you're talking and thinking about growth. It actually kind of, it lines up pretty closely with how we go about investing. So the FI community, by and large are buy and hold investors, as you alluded to via Warren Buffett. What's interesting about that in the Infinite Game, he talks about day traders as renting companies. They don't really have the best interest of the company in mind, their opportun- if you're a day trader, I'm not personally calling you out, this is just... think about this through the lens of a longterm mindset here.

Jonathan: You don't really care about the longterm health of the company, you're looking for when to get in, when to get out and what you end up doing as the day trader is you end up encouraging bad behavior, short-termism because the manager, the founder, the CEO, the individuals responsible for corporate profits have to be very mindful of that opportunistic nature of day traders and they have to make those decisions in mind. When you're a longterm buy and hold investor, you act as a ballast. You are an owner of that company for the longterm. You want to see that company succeed in the long term. In the case of index fund investors, if you're an owner of the S&P 500 or as an extension, VTSAX which is cap weighted, meaning the largest companies make up a larger portion of those funds, you are basically saying you're going to be a longterm investor of the American economy, America as a longterm wealth creator.

Jonathan: So, what's interesting is if I actually... if I viewed myself as having an interest, having the technical wherewithal to go look at perspective statements and company fundamentals and had the time and the interest, maybe, maybe then I could justify more of a Warren Buffett approach where I pick great companies with foundational moats and I hold those companies forever until the thesis changes, if it ever changes. But in a vacuum where everything's the same, I hold those companies for as long as possible because I'm not and I don't want to put a bunch of my energy there and I don't think that I can outperform. I am just a longterm buy and hold investor of the American economy. That's what I do. In my case, to the degree that I'm able through VTSAX, a longterm buy and hold investor of the world's economy.

Jonathan: That's kind of the mindset in here. It's a longterm-ism. We're not looking to get in. We're not looking to get out. I had a buddy ask me recently, he's like, "All right, do you think it's time to hop back on? Is the ship going right back up?" I was like, "I don't know man. I never got off. I have no idea. It doesn't really matter." The longterm mindset. I think if we as individuals think about our finances in the long term, we think about our business as entrepreneurs with a longterm mindset, we think about our consumption with a longterm mindset, we look out for those around us and we think about our investments with a longterm mindset, we're going to end up in a better place.

MK: I think my only thing to say was that, with FI we talk about how people spend based on their priorities and people are spending based on their priorities right now. To some people it's important to them to support their local coffee shop or their local restaurant and they are upping their budget for that to make sure that they are sustained through this crisis. For other people they're saying, no, this is what's important to me and so it's almost forcing them to put that into focus what those priorities are for their spending. That's I think more FI than when there's this abundance mindset of like, well, I can afford a little bit of everything here. It forces us all to reprioritize.

Brad: Yeah, I like that. I mean I think clearly if everybody, again, using this thought experiment, if everybody went towards FI, just like if everyone is stuck inside and can't shop, there is going to be and there would be short term pain. There's no question about that. But again, we don't ever see that truly happening but I think it would sort itself out with the right mindset. Again, people wouldn't be thinking in terms of short term. You wouldn't see so many businesses, even massive, massive businesses that just simply don't have cash reserves. They have six or eight weeks of cash reserve for their entire nationwide chain, right? Because again, nobody in the case of this Corona virus, nobody could have envisioned something like this where sales would go down 70, 80, 90 plus percent.

Brad: So nobody came up with plans. You need emergency plans and I think people probably would be able to weather storms both personally and business wise, they'd be able to weather them significantly better with a FI mindset. Again, you wouldn't see the short term-ism of leveraged buyouts and other things that we laud in the economy and the world today, which I think just shows misplaced priorities of, how can some person come in, get out, make a boatload of money and leave a company saddled with debt. Again, this is almost... this is beyond my level of expertise certainly but you see it over and over again and those types of companies are getting exposed right now because again, this could only possibly work in the best of best case scenarios and if anything went wrong, not less a catastrophe, you're in deep, deep trouble, right?

Brad: So I think FI mindset is, we plan for eventualities, which can happen or not even black swan eventualities like this but just normal everyday things. We like to say life is lumpy, which means you need to have some savings. You need to realize that, okay, my income is $2,000 I can't spend $2,000 every month on normal stuff because life is lumpy. Something is going to come up, you're going to have to pay a couple hundred bucks to fix something or maybe you want to go on a trip, if you had been saving a couple hundred dollars a month, you could do that without going into debt. So you need to just think in terms of everything isn't perfect all the time. You need to think about the future and be prepared for it.

Jonathan: As you were saying that two other things came to mind. One is, the working relationship and I guess the way that companies operate generally. I think with COVID, certainly we're seeing how this has kind of played out and shifted out but like in a more drawn out where increasingly more and more people are pursuing FI, two things, two or three things happen, which I think are huge. One is, the power situation between employer employee dramatically shifts to the employee as the employee has more and more ability to handle financial storms. The employer needs the employee more than the other way around, right? Two, and this is very similar to what we're seeing now, work from home and remote work situations, they increase exponentially.

Jonathan: Now, I think many people are going to come out... we've made this case in the past episode, many people are going to come out of this COVID situation and be demanding a more flexible work situation, but their ability to leverage that and lean on that are somewhat... still somewhat diminished if their finances aren't in place. Whereas when you have your finances in place, increasingly like that's just the bar. This is just what we do. I'm going to look for a situation where I can have my skillset and I can do it with flexible work situation, that's going to be something that companies increasingly offer as a benefit to capture the highest levels of talent. I see that that's going to happen regardless of whether or not 50% of the population pursue FI or not, those that do pursue FI will increasingly find situations where they can do this.

Jonathan: The other one I want to talk about, Brad, I know you have some thoughts on this is the college experience, right? Go to college for the college experience. Get the degree at any cost. College, the college experience took a face punch this year and I am very interested one in, what's going to happen when it resumes in the fall. Then two, in a world where more and more people are aware of the numbers going in, how the college experience changes.

Brad: Yeah. Jonathan, you just hit on something that you know I am very, very passionate about this. I think you-

Jonathan: I just set that [inaudible 00:39:26] right up for you. Just take it back at it buddy.

Brad: You set me up man. Oh man. Yeah, this might be one of my more impassioned and maybe controversial things, but I don't think it's really that controversial, honestly. I've been using this phrase, I don't think I've even said it to you, but I feel like there's been this like veil of insanity around colleges for decades now of just any price is justified, any price increase is justified and we all look around and we've talked about this on the podcast for years now and it just increasingly doesn't make any sense. It doesn't make sense to pay $60,000 a year for a piece of paper. It's really just signify... it's a signal that, okay, you have some bearer skills but it doesn't... I can't tell you what those skills are as opposed to... we've talked about skills are what truly matters and being able to prove that you can do jobs in this new economy, that's what matters.

Brad: So anyway, I genuinely believe that this is like the day of reckoning for colleges across, certainly across America, if not the world. It would not shock me to see... I mean, again, every so many institutions, whether that's businesses or we're talking here about colleges, they live on a knife's edge. We hear about the 50 or a hundred universities that have multiple billion dollar endowments, but for the other 3,000 or so universities and colleges in America that rely on, sorry, that rely on tuition and they are on a knife's edge, at all times they're spending just like pretty much everybody else in their personal lives, they're spending every dollar that comes in, they need to have all the students they anticipate show up or they're in deep, deep trouble.

Brad: I mean, Jonathan, I think a lot of people are saying, I don't know if this makes sense anymore. I think that's why I keep using that, the veil of insanity might be lifted here. Even if 10 or 15, 20% of kids don't show back up in the fall, which is entirely plausible, I mean, you might see hundreds if not a thousand plus colleges and universities in deep trouble, like significant, significant trouble. I think for a lot of people they are waking up and saying like, okay, this spring semester, I just paid $30,000 for my kid to have Zoom classes, right? This is really where the wake up call is and like, what are we doing here?

Brad: You can get any of those massive, the MOOCs, right? The M-O-O-C, you can get courses from Stanford and MIT and Harvard like already, you've been able to do that for years, they get less than a 1% completion rate on those courses, less than 1% and now your kids are getting from whatever college you go to, they're getting Zoom classes from their professors and you're paying 30 grand for that. There's no world where that makes any sense. So yeah, I mean, again, this is a long convoluted rant here, I apologize. But I think this is something that is going to be a massive shift in the world really and I think we should all be aware of that. I think selfishly, I'm pretty lucky that... both of us are lucky that our kids are young and I don't know what I would do if my daughter was a sophomore in college right now and we're looking at maybe spending 30 grand for a Zoom classes in the fall. I can't envision a scenario where that makes sense.

Jonathan: Well, people say but colleges that's an existing institution. I mean, that's part of the American institution right there. I was like, well, I haven't done a lot of research on this, but I would imagine if you go back to like the 1950s, 1960s, 1970s if you look at the number of colleges that were then and compare that to now, I would imagine there's been an exponential increase and Brad maybe you can correct me or someone in the audience can correct me in terms of what those stats actually are. But in my mind, if you're going to college at this point... my child is not going to college for the college experience. Now, you may say but they... that's what you do, you deserve that. Okay, it's simply just not going to happen.

Jonathan: I look at the role that college played in my own life and I look at where I increasingly see the future going and you could say, well malls, every kid deserves a chance to go to the mall and have the mall experience like that's part... It's gone. It's gone. It's a shadow. It's not going to be here and when your kids kids are talking they're... look, you need a job. You need skills to get a job. College historically has been one of the most proven ways to get the skills to get the job. That's a historical model, but when you're crowdsourcing everything, you still need the skills to get the job. But there's not a single person on my team that I know whether they even have a degree. I have no idea. I have none. You see people like Elon Musk at the highest level with one of the largest companies in the world saying, the degree doesn't matter to me. Can you do the job?

Jonathan: You've got to have the skills, you do. If a college is the best institution to do that, absolutely go to college, get the skills, but you better first start with, are they going to give me the skills? Do they have a vested interest in me getting the job? Colleges are going to have to prove value? The bar, they are going to have to prove that value to much, much higher level to be able to claim that premium that they're currently charging and if not, then the cost of college is going to plummet and it's probably going to be some of each. In my mind, what is it worth? How much would you pay for skills to get the job? In my mind, I'm scheming this out, I have a list of jobs that I'd want to pursue, I have an understanding of the skills that it would take to get that job, I feel like I could get most jobs that don't require a license and a degree to get most around $10,000. That's like in my mind you give me $10,000 in two years, I'll go figure it out at this point.

Jonathan: That's my particular perspective and if you have a parent with a senior in high school and they're really looking forward to their first year of college, I'm not here to try and get you to nook your plans. What I am saying is, what's your ROI? The conversation should not be around the college experience at this point because you don't want them to pay for that experience for the next 40 years. You don't want to pay for that experience for the next 40 years, you have student loans that outlive you. Rant over. Brad, back to you.

MK: It's something we've talked about before and it reminds me of like the Don Wettrik quote of like, if you want to be a journalist, start a blog, if you want to be a doctor, okay you have to go to college, you have to go to medical school. But if you want to work in something that's doesn't require these technical degrees and technical training, you can figure it out.

Brad: Yeah, and isn't that the interesting thing, right? It's actually an opportunity, to Jonathan's point about you can be wistful about a world that used to exist or you can get on with it and realize the world has changed. There are opportunities for me to learn or frankly to be the provider for learning those skills. You can learn on your own, you could try to learn skills or you can... why couldn't we as ChooseFI create something that taught people the skills that you actually need in the world, right? I suspect-

Jonathan: I feel like your willingness to an existence. Let's just go and say, what is the promise and what's the deliverable and then what's the next step, we'll get started on this year.

Brad: All right. You've... I don't think I can go there right now.

Jonathan: No, do it. I'm just saying do it. Audience he hasn't prepared for this. We haven't created anything, there's nothing in existence, but you heard it here first. Brad, what do we need to make man? What would fix this?

Brad: Well, I mean, I don't know if this would fix it, but I talked about this a couple of weeks ago where I would love to see... there are skills you need to learn to succeed at life. I would love to see the 80/20 analysis of those lists of skills and even down to like, people... the phrase that you hear a lot now is like mental models. I think a Charlie Munger from Warren Buffett, Berkshire Hathaway is famous for this and just a mental framework to succeed at life. I would love to see that built out and it could be just literally an hour or two, maybe even less from the top expert in the world at that... okay, you've got an hour to teach me, what is that look like?

Brad: Then you start that as a framework. That to me is a better framework than just some random arbitrary classes at a university. You're freshman and sophomore year when you're ticking off like the different requirements you have to take. If I knew as an employer that someone had these 20 mental models and they actually understood them, that means a heck of a lot more to me than if you took some type of a random literature class in freshman year of college. Like there's not even a question to me.

Jonathan: What if, like play this out, we're brainstorming. We just talked about Alan, we talked about creativity and when those creative juices flow. Again, you want a free master class in entrepreneurship, go to choosefi.com/rebel but now let's just go into a brainstorming session here. This is what that looks like. Brad, what do people want? They want skills and they want to be able to leverage those skills into a job. Now, what I appreciate that you're saying is that there is some mental models, it's not technically the skill set that you need, it's the mindset, right? That's the nuance here. What if you created your own... if effectively you created your own masterclass to life and here's the idea, you will create the 80/20, what are the mental models you need? Then you pair that with the skill sets, which are different. They might be different depending on the job. What you did is, what if you had a group of business owners all around the country with businesses of all different shapes and sizes, you went to them and you asked them what skills do you need? What are you looking for?

Jonathan: You're a FI business owner, you have a longterm mindset, you want people that want to work for a business owner with a FI mindset, et cetera. Again, in a world where everybody's pursuing FI, there's a lot more entrepreneurs, there's a lot more business owners with FI mindset. What if you ask them, what do you want? Okay, do you trust us to build that? What if we could then build that? What if we took that proof of concept and took it to these world leaders with these various mental models and asked them to teach it and this. Then how would you verify and then how could you connect the two and streamline it? I mean, what would that be worth? It certainly it would cost money. It would cost money for operations. It would cost money to bring people in, it would cost money for administration to handle that and make sure that it's a seamless process, but it wouldn't cost 30K, I know that.

Jonathan: What if you could prove how you could create this experience and you had people that bought the end goal, which is, I'm going to find a great employer that gets it, has a longterm mindset. I'm going to go in and I'm going to crush it for the next 10 to 15 years and when I come out I'm going to be financially independent. That's kind of like you get buy in from both sides and you connect the two together.

Brad: Yeah, no, I love that. I mean, I think... we've talked so many times about coding schools and things like that but that's just one tiny, tiny little piece of this. You could find a bunch of different industries and find those business owners and say, what are the bedrock skills you need if someone wants to pursue this profession? So yeah, to your point, you would have this foundation of, again, my kind of mental models as I think about it and then on top of that you would particular skills and then, right, if we're talking perfect world, and again this is cool, right? This is just a brainstorm that we're coming up with off the top of our head like, you would have different businesses in those industries lined up for people to actually get jobs and they knew that this person got these specific skills and these frameworks to succeed in life, not to mention the FI mindset, which in and of itself is valuable, right?

Brad: We have joked like again, similar to, I can't tell you what someone learned at random college X, but I could tell you if they listen to a handful of podcasts that I love that including ChooseFI certainly, that they would have a foundation for success. So like if you have that foundation and then you build on top of it these very concrete skills, you could build a funnel of the actual employment through the FI movement.

Jonathan: All right, there it is my friends, the future of FI. Now it only took us... Brad, it only took us two years to deliver on the recipes. So now we're going to blow up the entire educational institution and start from scratch so we should be able to do this by next week, right?

Brad: Oh, yeah. Yeah, yeah.

Jonathan: All right. All right. To our audience, all these ideas start as vapor, right? Every great idea started as vapor at some point and then execution was done. I threw this out there just to publicly have a brainstorming session with you and to get Brad's feedback and buy-in on this but this could happen. I don't know when, I don't know exactly what it looked like, but I can tell you that the thoughts are simmering and there's a lot of opportunity here. I don't know, maybe just give us your feedback.

Jonathan: If that's something that interests you, you're a business owner and you're like, hey, if you guys ever move forward with that, let me know. Or you're an individual it's like, well, I have a kid that's not going to need college for the next five or six years, but if you guys move on this, I would be... I'll be first in line. Let us know. I think the interest is there, it's one of those ideas. Again, pointing to Alan's presale your value before you create it, would this add value to the world in a world where more people are pursuing financial independence? I raise my hand and say, I think it would. You know what Brad? I think what it looks like, it looks like the rebellion and I'm excited that we're partnering with Alan on this podcast. I think this is a big step in it that you can learn these skills, you don't need permission to do so, you just need to show interest and take action.

Jonathan: Again to our audience for your action step this week, I'm telling you, it'll be the best thing you do for yourself, for your future self. It's incredible. Go to choosefi.com/rebel. Check out the Rebel Entrepreneur, subscribe today and on our show, stay tuned. Have you subscribed to our show yet? Subscribe, if you haven't subscribed. We'll see you next time as we continue to go down the road less traveled.

Speaker 2: You've been listening to ChooseFI Radio Podcast where we help middle class America build wealth one life [inaudible 00:53:52] at a time

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3 thoughts on “Join The Rebellion | Ep 204”

  1. When Jonathan said “… the power situation between employer/employee dramatically shifts to the employee as the employee has more and more ability to handle financial storms.” my ears perked up. This idea really needs to be explored in greater detail, as being FI or on the path to FI truly empowers the employee. The common tactic of threatening suspension without pay or termination has less weight when one has a high net worth and passive income coming in. When you’re on the path to FI, you have more options, and as Timothy Ferriss said, “Options – the ability to choose – is real power.”

  2. I completely agree with you Brad about the meal prep, what you described your wife doing is basically what I’ve tried to do for the past few years. We probably spend $60 a week to feed two people, which includes really high quality meat and fish. I guess the downside is now that I’ve really learned how to cook, when I go out to restaurants I’m usually disappointed with the food!
    I will definitely check out rebel entrepreneur – I have been self employed since 2011 and I don’t think I could ever go back to an office job 🙂

  3. # if everybody did FI … As a baby-boomer, I was not surprised to see interest rates falling when approaching retirement. We have always been the generation of the “too many”, sharing scarce resources, from kindergarten to the first job and now in retirement. In aging societies (as in most of Europe) too many people want to live off their investments, and not enough people are in the workforce. But somebody must do the job! That’s why I find it kind of “unfair” when young people who are still able to work don’t contribute actively to society, but compete with us older folks for good investment opportunities. Such abundance of investment demand might contribute to bubbles in the stock market. Each generation has their role and the very possibility of FIRE seems to depend on important disparities of incomes.
    N.B. This criticism does not apply to early retirees doing community work, contributing to non-profits etc. I do not see neither why frugal living and staying clear of debt (for individuals) would have any negative effect on the economy (except for a transition period).

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