Updates & Inspiration for Your Financial Independence Journey

Speculation or Investment? My good friend Chris Hutchins had Andy Rachleff, the co-founder of Wealthfront, on his podcast All the Hacks recently and it was a truly phenomenal episode.  You’ll likely see some more quotes from this episode in coming editions of the FI Weekly, but I wanted to start with Andy’s succinct distinction between a speculation and an investment: “The difference between a speculation and an investment is that an investment has a cash flow. You can evaluate its merits based on your expectation for those cash flows. Something that doesn’t have a cash flow is purely a gamble. Why should gold go up? It’s a shiny metal, it’s purely emotional. The same is true, I think, for cryptocurrencies. So, to me, they are speculations.  Commodities are speculations. I don’t think that speculations have a place in a responsible portfolio. That being said, people have a fear of missing out. So, they are going to do it and all I can say is keep it to a small percentage of your portfolio. The fact that they went up doesn’t mean the person who bought them was smart, it means they were lucky.  And that’s the part that people have a hard time understanding. 

Is Your Home Your ‘Biggest Investment?’ I purposely stirred up a hornet’s nest yesterday on Twitter (I’m posting there daily and if you like this newsletter, I think you’ll like my quick-hit takes on Twitter) with the following tweet: “My home is my biggest investment,” said no wealthy person ever. If the home you live in is your biggest investment, you’re doing investing wrong.” Many responses got caught up in anecdotes of “but wait, my house went up this much!” and while true, that completely misses the point.  As JL Collins wrote in this essential piece, your house is a terrible investment. But that doesn’t make owning a home a bad decision! On the contrary, it’s the right psychological decision for tens of millions of people. And it certainly doesn’t mean owning rental real estate is a bad investment.  It means simply, the home you live in should not be “your biggest investment” as much of society believes. Most people don’t save money, so this forced savings through monthly principal payments amounts to the only real source of wealth for many.  In the FI Community, we operate from a position of strength where we save money every month and continually add to

Worthwhile Splurges We’re finishing up our vacation and I’ve been thinking a lot about worthwhile splurges.  We so often focus on cutting costs in the FI Community, but I want you to consider what might be worth a premium to make an experience (or your life) better. Our example: Precise location on vacation is worth its weight in gold.  While this isn’t necessary in 100% of cases, we had two examples this month where we paid a roughly 10% premium for a perfect location and our vacation was quite possibly 3x as good for that small premium. 1) Airbnb in a lake community in the Poconos.  We were going to book a house a 5 minute drive from the lake, but for ~10% more, we got the single house closest to the main community center.  We were 50 yards from the rental shack for kayaks, standup paddleboards, etc. and 100 yards from the lake, pool and tennis courts.  It just made everything better. 2) Hotel in Ogunquit, Maine.  This is a really popular beach town with a lack of parking and a lot of traffic on the main road through town.  Knowing that, we paid a bit extra for a room that was a 30 second walk to the heart

Benefits of Board Games It’s no secret that my family loves to play board games.  We talk about board games frequently on the podcast, but thought I’d bring it to the FI Weekly in a little more depth. Simply put, board games have made us a better family. They’ve led to hundreds of hours of family time that is invaluable in bringing us closer together. They help promote rules in our family such as “Barretts never cheat.”  We all know this is the one sacrosanct rule that would be cause for near expulsion from the family.  Growing up, for some reason my dad always playfully (or not in many cases!) accused people of cheating and I made it clear from day 1 with my daughters that we never, ever cheat in games. If you want your kids to be better decision-makers and negotiators, introduce them to board games as early as you can!  Many parents underestimate their kids’ ability to play advanced games, but we threw them in the deep end and started playing games like Catan and Ticket to Ride when they were about 5 years old.  Sure, the first few times we had to co-play with them, but it’s amazing how

Saving Time on Vacation We’re on vacation right now and one of the biggest frustrations is how much focus goes into what we’re going to do each day for meals.  The time and energy that goes into finding restaurants, or going to a grocery store, shopping, cooking, etc. is ridiculous. The entire vacation ends up revolving around the simple act of eating. My wife Laura had a brilliant plan this vacation and she fried up 4 lbs. of chicken cutlets at home before we left and packed them in a cooler for our road trip (along with the sandwiches she made for the road trip itself!).  When we got to the Airbnb, we immediately froze them and then were able to pull them out of the freezer during the week.  This amounted to a combination of 4+ dinners/lunches throughout the week and just lightened the cognitive load of “what are on Earth are we going to do for our next meal?” each day.  To be clear, this did save a good bit of money over eating out those four meals, but the primary benefit we found was the time savings. Everything is Negotiable Episode 119 of the ChooseFI podcast introduced us

The Power of Incentives Incentives are one of the most important factors driving human behavior and Charlie Munger speaks eloquently on what he calls the “superpower of incentives” in these short quotes: If you have some free time and want to read Munger’s brilliant speech on psychological tendencies including a significant section on incentives, I suggest reading the transcript of The Psychology of Human Misjudgment.” This will make you smarter.  Full stop, no question about it. I try to pass along little bite-sized lessons to my daughters which we refer to as “strategy” sessions.  Here’s the most recent strategy session I highlighted on Twitter about incentives: Life Hack: Google Maps Google Maps ranks as the #1 most important app on my phone.  It is truly essential.  I just realized I have a tip for Google maps I hadn’t even shown to my wife, as we learned the hard way while in the mountains on vacation and her maps navigation stopped working when her phone lost its internet connection. You can download offline maps BEFORE you go somewhere you may have spotty internet connection, and it’s really easy to download: ChooseFI Community Taking Action This Week ​

What I’m Beyond Excited About A few months ago, I wrote about a deep dive I was taking into the new world of NFTs. It came with a promise that I’d keep you updated because I think this technology will change the way we live nearly on the level of going from no internet to internet. This is a 0 to 1 change that will transform everything.  It isn’t about “owning” some kitschy internet jpeg file like many of the media stories would have you believe, it’s about scarcity, ownership and insider access communities across nearly every aspect of life both online and offline. At first, I thought this was limited to ownership of digital items, but it’s so much more than that. Embedded in this Travel & Leisure article on “How Cryptocurrency NFTs Could Change the Way We Travel” was a simple but transformative use case: “Restaurants are also exploring the technology. Quality Eats, which has two locations in New York City, created an NFT-backed cocktail this spring called Into the Ether. In March an anonymous buyer, Opensea username 7AA335, purchased the drink’s secret recipe as well as the rights to a free round on every visit for .75 Ether, or about $2,000.

Taking Action Sometimes I get an email that is just so amazing it has to be included verbatim in the FI Weekly. Tyler wrote in with the progress they’ve made in the 53 weeks since finding ChooseFI: “This week we made an offer on our first rental property and the offer was accepted! 53 weeks ago, I found the Choose FI podcast. In those 53 weeks my wife, kids (8 and 6) and I have made some big changes. Like you said, nothing to do with pinching pennies but just being wiser with our time and money. In the last 53 weeks we have done the following on our path to FI: I know you and Jonathan didn’t create the FI movement but I wouldn’t have found it without you guys. You have changed my family’s life, THANK YOU!” Brad on Twitter? Words I never thought I’d say: I just joined Twitter. I’m blown away by the value our good friend Brian Feroldi is adding to the world with his Twitter account and he convinced me to join and see if I could do something similar.  I’m planning on making this account a more real-time “FI Weekly” with quick-hit thoughts, ideas, quotes, etc. 

The Essence of FI Part 2 Last week I included a section called the ‘Essence of FI’ and after some reflection, I wanted to add a Part 2: Part of the Essence of FI is how much you love your future self, and how much you value that future self.  It’s easy to merely live in the moment and maximize enjoyment now, with no care for the future you. Enjoying life is essential, but if you reframe delayed gratification as an act of self-love instead of deprivation, I think this slight mental pivot will greatly enrich your day-to-day life.  In my own life, I know I’m giving a gift to my future self when I save money, exercise, eat less, and go to bed instead of scrolling on my phone.     I’ve started a practice of literally thinking about my future self when I grapple with difficult decisions that I know are a long-term benefit, but would be so easy to do the opposite in the short-term. Active Duty Military: Huge Benefit A large percentage of our community is active duty military, so if that’s you or you know someone on active duty, please pass this along: American Express waives

The Essence of FI I was listening to the All The Hacks podcast episode with Morgan Housel and the following quote from jumped out to me as the essence of the financial aspect of FI: “I’ll leave you with one financial hack that might disappoint you, but it’s the only hack that works and it works incredibly well in finance. You want to do well with finance? Spend less money than you make and be patient. That’s 90% of what finance is, and if you can actually do those, you have a black belt in finance.  It’s the only hack that I think really truly works in a way that moves the needle.” It prompted me to reflect on what FI truly means to me.  It certainly isn’t about being cheap, pinching pennies, or living a deprived life in any way. It’s about finding value in everything you purchase, making intentional decisions, and taking action to make life better.  It’s about long-term thinking and the power of simplicity, compounding, and autonomy. It’s about spending time with people you love, doing things that challenge, inspire, and energize you. Simply put, the path to Financial Independence is the road to freedom and a better life. But make no mistake, it

Books I’m Enjoying (Plus a Quote) I’m currently reading two of the best books I’ve read in my entire life (shout out to the FI Weekly community for recommending them!); reading these will definitively make your life better, so first check if your local library has them, but if not, the Amazon links are: The Psychology of Money by Morgan Housel Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life by William Green In the “Beyond Rich” chapter of Green’s book, this paragraph jumped out to me, as it touches on so many things we talk about at ChooseFI: “Money can provide an invaluable cushion, a lifeline, a critical defense against uncertainty and misfortune.  But it’s not enough.  We also need the mental fortitude and resilience to weather those storms and rebuild in their wake.  For most of us, the quality of our lives depends less on our finances than on inner attributes such as equanimity, acceptance, hope, trust, appreciation, and determined optimism.  As John Milton wrote in Paradise Lost, which he dictated after going blind, “The mind is its own place, and in itself can make a heaven of Hell, a hell of Heaven.” Two

Take Action The main reason ChooseFI exists is to inspire you to take action to make your life better. Small changes compound to something significant, and you’ll be amazed how wonderful it feels to get started taking control of your life! A friend of mine recently found the FI Community, and he asked for ideas he could implement today to get started with some quick but significant wins. Here are the items we talked about for huge impact, but minimal effort (and this represents a small fraction of easy things YOU can do no matter where you are on the Path to FI): Look into refinancing your mortgage. Admittedly this isn’t minimal effort to complete, but getting a quote is nearly effortless and you potentially could save hundreds of dollars every month in mortgage payments. Change your cell phone carrier to either Mint Mobile or Republic Wireless. If you’re still with a legacy carrier, this can be a massive savings every month! Open an investment account at a place like Vanguard or M1 Finance. My friend thought he needed to wait until he had $3,000 to invest in the VTSAX mutual fund, but I told him about the exchange-traded fund symbol VTI which is nearly