Updates & Inspiration for Your Financial Independence Journey

Mental Models: FI Math A few weeks ago, I talked about the importance of mental models to leveling up our problem-solving abilities. I came across an article in the Washington Post yesterday that happened to be about the UK coronavirus variant and its increased reproduction rate and I thought it was a perfect example for the FI Weekly. My bringing this up here isn’t necessarily about coronavirus, but the increased level of understanding we all have when we understand exponential math, the math behind the compound growth of our money, and mental models generally. The article noted that in a Facebook post, the Danish “Prime Minister Mette Frederiksen told people to imagine sitting in the top row of Copenhagen’s Parken Stadium, a soccer arena with a capacity of 38,000 people. A dripping tap is filling it up, one drop the first minute, two drops the second, four drops the third. At that rate, Frederiksen said, the park will be filled in 44 minutes. But it will seem almost empty for the first 42 minutes, she said. “The point is, you only realize that the water has risen when it’s almost too late.”” When you work backwards with it doubling every minute, the

FI Wisdom – Berkshire Hathaway Edition I came across quotes from two of my heroes, Warren Buffett and Charlie Munger from Berkshire Hathaway, that I think do an incredible job of encapsulating the two aspects of the journey to FI:  Warren Buffett: “Do not save what is left after spending; instead spend what is left after saving.”  Charlie Munger: “There were a lot of questions today — people trying to figure out what the secret to life is, to a long and happy life…The secret is easy, because it’s so simple:  You don’t have a lot of envy.  You don’t have a lot of resentment.  You don’t overspend your income.  You stay cheerful in spite of your troubles.  You deal with reliable people.  And you do what you’re supposed to do.  And all these simple rules work so well to make your life better. And they’re so trite.”  New Podcast I’m Enjoying ChooseFI community member Heidi Dusek recently started a podcast called ‘Ordinary Sherpa’ and it’s genuinely fantastic! The theme of the podcast is to “help families connect through simple and authentic adventure experiences” and our very own Edmund Tee was featured in Episode 8.  Give it a listen:  Ordinary Sherpa And

Favorite Books List I was blown away by the response to last week’s newsletter asking you to send me the best book you’ve read in the past year. I can’t thank you all enough for the overwhelming response!  I’m still digging out from the deluge of emails and hope to publish a much longer list of recommended books in the future, but in the meantime, here are the books mentioned most frequently:  Atomic Habits by James Clear (guest on Episode 157 of ChooseFI)  The Psychology of Money by Morgan Housel  The Wealthy Gardener by John Soforic  Can’t Hurt Me by David Goggins  Die with Zero by Bill Perkins  Deep Work by Cal Newport  The 12 Week Year by Brian Moran  Sapiens by Yuval Noah Harari  Never Split the Difference by Chris Voss  Quote I’m Pondering James Clear, author of Atomic Habits (the #1 most recommended book above), on Episode 145 of the ‘Feel Better, Live More’ podcast with Dr. Rangan Chatterjee:  “If there is ever a gap between your goal and your system; if there’s ever a gap between your desired outcome and your daily habits, your daily habits will always win. It doesn’t matter how good your intentions were. It doesn’t matter what you hoped to achieve. It’s what your habits

2021 is Here: Start Contributing Happy New Year!  Now’s the time to take action on filling up your 2021 contributions to your accounts including HSA, IRA, 401k, 403b, 457, etc.  Thanks to my trusty ToDoIst reminder to max out my HSA, we already contributed the family maximum of $7,200 for 2021.  (as an aside, I was recently asked for HSA company recommendations and the two we see recommended most frequently are Fidelity and Lively for low or no-fee options.)  Here’s an article from The Motley Fool discussing the 2021 limits, but in general terms, for workers under 50, they are as follows:  401k: $19,500 employee contribution  IRA (traditional and Roth): $6,000  HSA: $7,200 family ($3,600 individual)  Back to Basics: JL Collins Returns The ChooseFI podcast continues our ‘back to basics’ theme into 2021 with some exciting news: JL Collins returned as a guest in Episode 284! Check it out and be comforted by Jim’s incredible message of low-cost index funds being your highest likelihood of long-term wealth building success.  And a sneak peek for readers of the FI Weekly: Brandon, The Mad Fientist, will appear on the podcast in the next few weeks, so stay tuned! He’s been working on a passion project that I know he’s

​ 1% Better: It’s Always a Choice Brian Eufinger, 2-time podcast guest (episodes 114 and 154 on college scholarships and student aid) and co-founder of SAT & ACT prep company Edison Prep, emailed me an amazing YouTube video called “The Choice” and I’d highly recommend you take 4 minutes and watch it.  This animated video is the perfect representation of the compounding benefits of making better choices in your life, from listening to an audiobook instead of the cortisol-inducing news, to going to the gym instead of just sitting on the couch and watching Netflix.  “Small choices become actions, actions become habits, and habits become our way of life.”  Watch “The Choice” Community Businesses Started in 2020 I wanted to highlight some ChooseFI community members who started businesses in 2020 and are thriving even amidst all the craziness this year has brought.  I’m planning to make this a regular part of the FI Weekly, so if you have a success story of a newly started business, let me know!  Bryan started ‘3×5 Life’, a company that sells super elegant and convenient gratitude journals that fit on a 3×5 index card. I’ve heard the benefits of a gratitude practice on happiness levels

​ End of Year Review and Planning for 2021 We are finally nearing the end of 2020 (insert your favorite exclamation/expletive here)! This has been such an unusual year in so many ways and it’s critical to get everything in order financially and mentally before the end of the year and have a plan to move forward into 2021 with some momentum to get after your goals. Here are some resources I think will help: For the first time in my life, I’m truly conducting an annual review and setting goals for the upcoming year. Stephen from our Foundation’s free FI 101 course, introduced me to Chris Guillebeau’s article on laying out annual goals that are specific and measurable with concrete action steps and it really appealed to me. I think you’ll find this method valuable: Set your goals Our team put together an excellent Year-End Financial Checklist that I think is well worth your time. We always talk about taking action, and now’s the time to review some of the pillars of your financial life: Complete the checklist Sean Mullaney, the FI Tax Guy, joined us on ChooseFI Episode 274 to discuss year-end tax moves for 2020 and what you need

​ Mental Models for Clearer Thinking Financial Independence is about so much more than the nuts and bolts of money. It’s about building an empowering mindset that helps you thrive no matter what the world throws at you.  And 2020 has sure thrown a lot at us.  One of the best ways to be prepared mentally is to upgrade your mental toolbox, so you can work through problems clearly and rationally, even when faced with something new and unexpected.  I was first introduced to the concept of ‘mental models’ in Charlie Munger’s “Poor Charlie’s Almanack,” and it has formed the foundation for how I approach problem-solving.  Similar to the ‘talent stack’ concept, building mental models starts with having a basic understanding of a diverse set of disciplines, from cognitive biases to economics, to physics, chemistry, and biology to probabilistic thinking and beyond.  As Shane Parrish, host of ‘The Knowledge Project’ podcast, wrote in his book The Great Mental Models Vol. 1:  “Not having the ability to shift perspective by applying knowledge from multiple disciplines makes us vulnerable. Mistakes can become catastrophes whose effects keep compounding, creating stress and limiting our choices. Multidisciplinary thinking, learning these mental models and applying them across

Live ‘Year End Wins’ Event Tonight Jonathan and I are hosting a Facebook Live event tonight (12/8) at 7:30 pm EST and we’d love for you to join us! We’ll be chatting with 20+ community members sharing their 2020 wins with the ChooseFI community. This will be inspirational and a great way to encourage us all as we move into 2021. Join the Live Event ChooseFI: Friends of the Library In response to my “free events in your town” section last week, Jami wrote in: “Hi Brad – regarding the low-cost and free family entertainment options, also inquire at your local library. A number of them have passes to museums and exhibitions that you can “check out,” allowing you to visit a place charging admission for free.” Next time you visit the library, approach the librarian, and ask if they have any interesting or unusual items available to check out. You might be surprised at what you find! Here’s a list of 200 unusual items available at libraries across the country: Check It Out! Tiny Habits to Change Your Life Gavin sent me a really interesting email about small habits that can dramatically improve your life: “I just read this article and

Free Events in Your Town/City On one of our earliest episodes, Liz from Frugalwoods.com taught us something that might be counterintuitive: Entertainment in a city can be incredibly inexpensive. Free in many cases. There are many cultural events, museum exhibits, and university offerings (among many others) that are completely free – if you just take the time to look for them. My family loves outdoor activities and we learned that The Valentine museum offers free “self-guided Richmond history tours” complete with pdf walking guides and maps. 2 of the past 3 weekends we’ve set out, maps in hand, and explored areas of the city we’d only ever heard about! What activities can you find for free in your local area? Words to Live By: Alan Donegan Edition Our good friend Alan Donegan from the Rebel Entrepreneur podcast posted a video on Facebook about a 40 burpees per day physical fitness challenge he’s taking part in with his wife Katie. The video of Alan & Katie doing their burpees rocked my world: At the end of each burpee, they each jumped as high as they possibly could. I wrote to Alan, “Those are legit jumps at the end!” To which he responded, “Push

The Subtle Art of Saying No A friend introduced me to the Harvard Business Review’s IdeaCast podcast this week and said their episode entitled, “The Fundamental Human Relationship with Work” was the anthropological case for Financial Independence, which was fascinating.  This quote from “The Subtle Art of Saying No” episode really impacted me:  “Every bad ‘Yes’ crowds out a much better ‘Yes,’ just as every well-reasoned, well-timed ‘No’ makes room for a better ‘Yes.’  You say yes because in the moment you want to please…that’s a bad yes.”  It’s so easy to say “Yes” or even “Maybe” when you know the answer should be “No.”  I challenge each of you to look for ways to simplify your life by cutting out the reflexive “Yes” responses to meetings, events, calls, etc. that you know in your heart you need to cut entirely.  ​ FI Weekly Benefit: 15% off at the ChooseFI Store I always want the ‘FI Weekly’ newsletter to add value to your life, and this week it is more tangible than most: We just launched the ChooseFI Store on our new website featuring incredible prices on eBook bundles plus some cool ChooseFI apparel and collectibles.  If you use the coupon

Designing Your Year for 2021 We published an important podcast episode yesterday:  Episode 270 of ChooseFI with Dominick Quartuccio of ‘The Great Man Within’ Podcast; I highly recommend each of you not only listen, but take the time to go through the exercise of reviewing 2020 and designing 2021.  Natalie wrote in and said, “Hi Brad. I wanted to say thank you for the episode on Designing Your Year for 2021. As I was listening, I made a mental list of my stand-out moments–1) I lost 20 lbs 2) because of COVID, now have the opportunity to remote work forever 3) joined the double comma club in my retirement accounts and 4) got my kids interested in financial independence largely because of Choose FI’s Simple Start-Up and related pod episodes (I taught my 10-year-old how to calculate ROI when playing the game Cashflow for Kids!)  My work on mindset is going to serve me well to make 2021 my best year yet!” Life Hack: Scanning Old Pictures with Your Phone Jake sent in a great life hack for those of us with stacks of old photographs:  “This week I found out about the Google PhotoScan app and it helped me digitize my physical photos

1% Better: Building Life Skills Our family’s latest obsession is the cooking show ‘MasterChef Junior’ with Gordon Ramsay. Early in Season 6, Gordon demonstrated how to make an incredible pan-seared chicken breast. My daughter Molly is learning to cook and wanted to test this out. The next night she gave it a try (with some help from mom and dad) and to say it turned out well is an understatement! This was the best chicken I’ve eaten in my life and it was so easy to make! It was just about having the knowledge and the interest to give it a try. Molly is 8 years old, and now, for the rest of her life, she can cook a piece of chicken like the best chef in the world. She followed an interest and simply watched the YouTube replay a few times, took notes, and tested it out. This is how we all can continue to build life skills to keep getting 1% better every week! Check out Gordon’s technique ​ Increasing Your ‘Luck Surface Area’ Danny Kenny of FI-nancialPlanner.com sent me an article on increasing your ‘luck surface area’ and a TED talk from Dr. Tina Seelig of Stanford on ‘The little