Updates & Inspiration for Your Financial Independence Journey

I Bonds: Best Time to Sell? Sean Mullaney and I discussed ‘I Bonds’ on Episode 447 and just after we published that episode I came across this short, but amazingly thorough article from the Doctor of Credit website called ‘When to Sell off Our I Bonds’ thanks to a post in our ChooseFI Facebook group. This is the article you are looking for if you purchased Series I Bonds at the height of their interest rates in 2021 and 2022 and want to know the best time to sell so you minimize the interest lost with the 3-month penalty (you lose the last 3 months of interest if you sell your I Bonds within the first 5 years). Capital Gains Taxes 101 Two weeks ago in the newsletter I included a section on income limits for the 0% Federal Tax rate on long-term capital gains, and my friend Jesse from The Best Interest blog and podcast sent me an email with his excellent article on Capital Gains Taxes 101 that I think will be really valuable for many of you to read. This is truly a FI 101 topic that is foundational to understand what capitals gains are and how they are taxed.  We’ll all

Roundup is Back! Fun news: we brought back the “roundup” podcast episodes with yesterday’s release of “Episode 448: July Roundup!” Ginger, my cohost on the episode, and longtime community member, loved the roundups that Jonathan and I did in the early years of the show and thought they provided a way to further cement the learnings gleaned from the episodes. In Ep 448, I referred to an article on ‘Return on Hassle’ that Nick Maggiulli (former guest on Ep 404) wrote about The FI Couple and the hassle vs. return of their real estate portfolio. I think ‘return on hassle’ is an important concept to keep in mind as we all contemplate our investment strategies, and Nick’s article does a great job illustrating this. Since this is truly the “Ultimate Crowdsourced Personal Finance Show,” I am doing everything I can to bring you, the community, into the show with more mailbag episodes (see episode 447 with Sean Mullaney) where we can answer questions, highlight wins, and much more. So keep the questions, suggestions, and wins coming by hitting reply to any of these FI Weekly newsletters! Local Group Case Studies Diania Merriam, founder of the EconoMe Conference, recently published this incredible post about

Chad Carson’s Real Estate ‘Buy Box’ Chad Carson joined us last week on Episode 446 of ChooseFI to talk about his ‘Small and Mighty’ framework for real estate investing and it was so invigorating to see a successful real estate investor understand what enough means, instead of constantly striving for more. The episode is fantastic, so if you haven’t listened yet, hit download on your podcast player of choice. Chad also offered a special free pdf download only for readers of the FI Weekly that describes his personal ‘buy box’ – the criteria he looks for when purchasing a property. This pdf looks simple, but it is truly hard won wisdom learned over a 15+ year real estate investing career, so it’s incredibly valuable and well worth the download in my opinion. As a note, Chad’s book came out last week and he and offered our community a 10% discount if you use the coupon code ‘choosefi.’ 2023 Income Limits for 0% Capital Gains I found the CNBC article “Here’s how much you can make and still pay 0% capital gains taxes for 2023″ and I wanted to feature it here in the newsletter this week because it highlights a major benefit for those of us in

FI Community’s Money Rules In last week’s newsletter I linked to a Ramit Sethi post about his ten ‘Money Rules’ and then asked you to respond with some of your money rules. Here are some of the amazing responses you sent in (this is a longer newsletter today because I wanted to include so many of these emails): ·  Alison’s money rules: “1) Save & invest 50% the second my paycheck hits my account 2) Always have 3 months emergency cash fund 3) Any purchase is always bought in full 4) It’s always worth paying more for a direct flight 5) Vacations are not the time to worry about money 6) Don’t buy a salad at a burger restaurant 7) Don’t loan anything out that you want to have back 8) Talk about investing and savings to anyone who will listen! 9) When you’ve decided to spend, spend without guilt 10) Only buy second hand clothing (this one is more for the planet) ·  Rachel’s money rule: “Like so many FI’ers, I had a hard time overcoming the guilt of spending after so many years dedicated to saving. A few years ago, I came up with a solution that flipped the mental

Your Personal Money Rules If you haven’t listened to Episode 444 of ChooseFI with Doug Cunnington and Carl Jensen on ‘Spending for Happiness’ that came out last week, I think it was one of our best and most important episodes. We’re already talking about doing round 2 soon! We talked about Ramit Sethi’s “Money Rules” and I referenced an outdated version, but just found that Ramit posted his updated list of 10 Money Rules last week on Twitter. Along the lines of ‘spending for happiness,’ the ones that jump out to me are: I think this is a fascinating exercise for you to take on for your own life and I’d love to hear about it so hit reply and let me know a Money Rule you set up for yourself that has added value to your life. FI Essential: Emergency Binder Michael Girdley went viral on Twitter a few days ago with his thread on ‘The Green Box Exercise’ for how to prepare to make life easier for your loved ones in the days after you die. This was a comprehensive look at all the documents and contacts you need to have listed out for your family members so they are not flailing around looking for essential

Financial Independence Celebration On this July 4th – Independence Day here in the US — I want to celebrate you and your pursuit of Financial Independence. Even though we number in the millions worldwide, we are still a relatively small and surprisingly misunderstood community. There is this caricature that we are misers and not enjoying life and just living for tomorrow. Nothing could be further from the truth. This is a community of people trying to live their best lives and pursue lives of freedom, autonomy, and purpose. But in order to get beyond the caricature you needed to listen/read with an open mind and realize how life-changing FI could be for you and your life. And how easy it could be to take small actions to make your life better 1% at a time. Every path to FI looks a little bit different, but it all comes back to getting up off the couch and taking action to make your life better. I want to thank you for being part of the ChooseFI community and for subscribing to the newsletter. It means a lot to me. Here are some community members who wrote in with wins of all types: Jill’s Story of Taking Action Jill wrote

ChooseFI AI: Search the Podcast I am incredibly excited that ChooseFI was one of a select group of ~10 podcasts chosen to be included in AI company Dexa’s initial launch and it just went live! Head over to Dexa.ai/Choosefi and you can check out this functionality that I have long dreamed of for our show:  All 600+ episodes of the podcast are now searchable! The ChooseFI AI was loaded with every episode of our podcast and you can ask it any question you want and it will summarize the answer with our words. And, if you want more detail, it references the exact podcast segment(s) and takes you there so you can listen. This is a massive breakthrough as it’s always been nearly impossible to find the various segments on topics as random and diverse as ‘college savings hacks’ to the power of compounding to the Roth IRA Conversion Ladder. Now it’s a simple question away and I could not possibly be more excited about it! The Dexa team is wonderful to work with, so if you have feedback or suggestions on how to make the tool more useful, hit reply and let me know and I’ll pass it along. What I

Tax Notices: Penalty Removal Request It’s the time of year where the IRS and state tax agencies send out tax notices for additional tax due, underpayment of estimated payments, etc. There are usually 3 components of the amount due on a tax notice:  Tax liability, interest, penalty. A tip that I’ve passed along on the podcast that has been really effective for many members of the ChooseFI community is that you can request an “abatement” (removal) of the penalty. I’m always careful to say this is NOT tax advice to you personally – just what I’ve experienced anecdotally in my career. The key to an abatement request is to write a short letter (or fill out IRS Form 843) in response to the taxing agency explaining that you made an honest mistake, you did not intend to underpay your tax liability and you have taken steps to make sure it won’t happen in the future. If owed, you would also include a check for the tax liability and interest along with this abatement request letter. For specific language to include in your abatement letter, I found many examples by Googling the topic. 2nd Generation FI: Learning to Spend One of our

A Year’s Worth of Wins We call ChooseFI the ‘ultimate crowdsourced personal finance show’ for a reason: You, the community, continue to send in remarkable details of the actions you’re taking to transform your lives. Seeing these wins further emboldens other members of the community to take action and it’s a positive feedback loop. Here’s an email from Eric that just came in: “I can’t answer the ‘what I did last week’ question very well, but I can answer what I’ve done over the past year. FYI, I was never “bad” with money, but I never cared about it and didn’t truly understand the power it has to change your life. When I was younger, I never needed much, but I spent freely and saved the typical 5-10% like a chump. Here are my hot takes from the last year: – I turned 35 last May and decided that was a line in the sand for my family’s FI starting point. – We started to track all spending and calculated we were at about $330,000 net worth, which includes the equity in our house. – We sold my car and a side by side. Both were paid off and nice,

Is the 4% Rule too Conservative for FI? Two former guests on our podcast, Brandon the ‘Mad Fientist’ and Nick Maggiulli, teamed up to produce a wonderful article on Brandon’s site called, “The Problem with the 4% Rule (and Why You Could Retire Even Sooner).” These are two smart, data driven individuals, and they didn’t disappoint in their analysis in this article, especially with the critical section ‘Incorporating Flexibility Into Your Withdrawal Strategy.’ Normally I’d curate my highlights here, but since I really want you to click through and read it in its entirety, please take my advice and click the above link. Ambitions, Expectations and Standards Shane Parrish, the host of The Knowledge Project podcast, posted something profound on Twitter that I wanted to quote in its entirety, as I think there’s essential wisdom here from Shane: “Big ambitions, low expectations, and high standards are a powerful combination for living your best life.Ambitions pull you forward when it’s hard because they connect you to something larger.  One of my most important ambitions is to be a great father. Another is to grow Syrus and FS (Brad’s note: his 2 companies). You can’t have a meaningful life without a connection to something larger than

9 Basics of The Simple Path to Wealth I wanted to pass along two wonderful pieces of foundational content from two close friends of ChooseFI. We’ll start with JL Collins, and for this we’ll go back to one of his most important posts, “How I Failed My Daughter and a Simple Path to Wealth.” Here are JL’s 9 basics he described to his daughter to get on The Simple Path to Wealth, directly quoted from the article linked above (all links are to other JL blog posts): 1.       Avoid fiscally irresponsible people. Never marry one or otherwise give him access to your money. 2.       Avoid money managers. It’s your money and no one will care for it better than you. 3.       Avoid debt. 4.       Save a portion of every dollar you get. 5.       The greater the percent of your income you save and invest, the sooner you’ll have F-You money. Try 50%. With no debt, this perfectly doable. 6.       Put this money in the Vanguard Total Stock Market Index Fund (VTSAX). This is the fund you already own, so just keep adding to it. 7.       Realize the market and the value of your shares will sometimes drop dramatically. People all around you will

Free Real Estate Investment Analysis Tool Our friends Ali & Josh from The FI Couple (Episode 430) created a free real estate deal analysis tool that I wanted to pass along here in the newsletter as I’ve been really impressed with them generally and I’m certain this will be quite valuable if you’re looking to get into real estate investing. They designed this free tool to help FI Community members interested in buying real estate understand the potential return on investment a real estate opportunity might offer. It is set up to help you determine specific metrics including: Cash on Cash Return, Net Operating Income, Cap Rate, One Percent Rule and then ultimately help you decide on the viability of making an offer on potential rental properties. Check out Ali & Josh’s free real estate analysis tool here. Actions Taken: Insurance Savings Last week, I challenged you to take action on your insurance policies to see if you could lower your premiums.  I want to highlight a few recent wins from the community for some extra inspiration: Ben wrote in, “For my 1% better I cancelled a whole life insurance policy, saving $550/month (I have adequate term coverage). This also will