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134R | Quit Like A Millionaire

Brad and Jonathan give updates on solar panels and YNAB. Plus, Kristy Shen and Bryce Leung from Millennial Revolution talk about their new book.

Solar Update

Currently, Brad is having solar panels installed on his house. Although it is a large upfront cash outlay of around $20,000, Brad thinks that the return will be around 9 or 10%. If the solar panels produce around $1,800 to $2,000 of electricity each year, then the return for that investment is definitely worth it.

Brad hopes that the solar panels will also change their behavior towards electricity consumption. The goal of each year will be to have their total electricity bill equal to 0.

Listen to our full discussion about solar panels here.

YNAB Update

Last week, Jonathan let us know about his YNAB experiment. So far, the experiment seems to be going well. With his payday in the middle of the month, Jonathan and his family have started to see that scarcity mindset in the beginning of the month as a positive.

Already, Jonathan has been able to defer purchases for another day. Potentially those purchases could be never followed through on.

If you are looking for a way to slow down your spending, then Liz from the Frugalwoods recommends the 72-hour rule. If you still want to make the purchase after 72 hours, then go ahead. Otherwise, you just avoided an impulse buy. (Listen to the full episode with Liz here.)

Related: My Favorite Budgeting Software: You Need A Budget (YNAB) Review

Share Your Story

Jim from Route to Retire showed us that anyone can achieve something remarkable if they follow replicable steps. Simply saving more than you spend for an extended period of time can have a huge impact on your life. Jim’s story is not the same path that everyone will take, but it is a path that many people can relate to.

Listen to the full episode with Jim here.

Do you have a story that you think other people could benefit from?

You just need to have a story that you feel is worth hearing.

If you want to be featured on the show, then head over to the application page here.

 Pay Off Your Mortgage Or Invest

Last week’s episode, 133R, really kicked off a great conversation about whether you should pay off your mortgage or invest. In the comments, listeners mentioned mortgage interest deductions, taxes, and capital gains in relation to this ever-deepening question.

Listen to that full episode here.

Don’t worry! We will cover more on that subject to hear differing views in the community soon.

Quit Like A Millionaire

Kristy Shen and Bryce Leung’s book Quit Like A Millionaire: No Gimmicks, Luck, Or Trust Fund Required will be out on Tuesday, July 9th. It is an amazing story but it also has actionable advice that you can use when you are ready to pull the trigger on a drawdown strategy.

Shen grew up in China in deep poverty. As a child, she lived on .44 U.S. cents a day and had no idea what a toilet or shower would be like. However, her dad was about to pull his entire family out of poverty through earning his Ph.D. in the West. For her father, the chance to study for his Ph.D. was the best opportunity to move out of poverty. The decision to move Canada for an education was a hope based decision that was fueled by survival because it seemed to be the only way to support his entire family.

My upbringing taught me a lot about perspective.

Shen realized that if you had a home with four walls, food, water, and your family then you were better off than most people in the world. After coming to Canada with her dad through education, she placed a high value on education.

Not all degrees are created equal and if you want to figure out how money works then you really have to make logical decisions about how money works using education as a tool.

Listen to Kristy and Bryce’s first visit to the show where they discuss their views on real estate.

The ROI Of Education

When Shen was choosing her college degree, she had to choose between her passion for writing and a more practical degree. Her father told her that he would not be able to support her, so it was essential that she choose a practical degree.

She used the Pay Over Tuition (pot score) to determine what degrees would have a good ROI. After looking at creative writing, accounting, and software engineering, she chose computer engineering based on her scoring system.

Shen has not regretted the choice to follow a lucrative career path. In fact, she says that changing passions make it more practical to fund your passions with a lucrative job instead of relying on your passion to fund your lifestyle.

The idea that we would have the exact same passion for the rest of our life is kind of ludicrous. You actually end up having a lot of passions in your life.

Plus, you do not have to be fully FI in order to make a career switch. If you have a strong portfolio, then you are able to take risks along the way.

The Scarcity Mindset

After growing up in abject poverty, the scarcity mindset was undoubtedly a part of Shen’s life. However, she viewed it as a positive. She knew that because she was unable to throw money at the problem, she would need to get creative. Shen has been able to creatively make her way through life and build skills that may not have been possible without the scarcity mindset.

Without her scarcity mindset in the beginning, Shen says it is unlikely that she would have hit FI. However, that mindset did hold her back in terms of investing. That’s where Bryce came in. He was able to see that the money they were gathering could be used to buy their freedom.

She is really good at gathering bricks. And then kind I went and looked at the giant pile of bricks and was like, ‘we could build a castle out of that.'”

With his more optimistic mindset, Bryce was able to take their rapidly growing savings and leverage that into Financial Independence.

The book follows the couple’s story and maps out how they achieved Financial Independence instead of purchasing a ‘dream home’ or other luxuries.  Through their story, you can better understand how money works.

If you figure out money, life is incredibly easy. If you don’t figure out money, life is incredibly hard.

You do not need a Ph.D. to understand money, but you do need to take the time and learn about it. This book is the perfect place to start.

Playing With FIRE Update

If you still need tickets for your local Playing with FIRE screening, then head over to Tugg. There are many showings coming soon that still need to sell tickets.

Also, there will be a special evening of Financial Independence hosted by Jonathan and Brad in Richmond, VA on July 19th. It should be a nice evening introduction to FI. If you are coming, then head here for tickets. If you have a large group and would like a group rate, then email [email protected].

Here are the showings that still need your help with ticket sales:

  • Santa Cruz, CA
  • Bozeman, MT
  • Foxboro, MA
  • Poughkeepsie, NY
  • Oklahoma City, OK
  • Rockford, IL
  • Minneapolis, MN
  • Boston, MA
  • Farmington, NM
  • Medford, OR
  • Reno, NV
  • Littleton, CO
  • Roswell, GA
  • Pearl, MS
  • Mountain View, CA

Related Episodes

New to FI? Be sure to check out Episode 100: Welcome To The FI Community!

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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