Updates & Inspiration for Your Financial Independence Journey

Markets Dropping As I’m writing this newsletter Monday morning, the S&P 500 is down 2.3% from the prior close, which brings the year to date drop to over 12% in just a few short weeks. It’s remarkably easy to get caught up in the doom and gloom of seeing 10%+ of your net worth evaporate (on paper at least) in one month. It obviously never feels good, but we know from listening to JL Collins, that stock market corrections (10% drops from recent peaks), bear markets and even crashes are perfectly normal and expected over an investing lifetime.It is a normal part of investing. And while it’s impossible to know where the markets go from here, my belief in the FI Fundamentals of having a significant savings rate and continuing to purchase new shares of the Total Stock Market Index Fund at a “discount” in bad times will play out as my best bet over the long-term. Now is a good time though to take 10 minutes to listen to JL’s Guided Meditation for When the Stock Market is Dropping, which never fails to make me feel calmer and more at ease. Lower Cost Medical Care Options I saw an interesting article

Doing the Right Thing “Doing the right thing is ultimately more likely to ensure you the greatness or the success that you’re after than doing the expedient, sort of self-preserving thing.”      — Ryan Holiday, author of Lives of the Stoics, on Episode 128 of The Knowledge Project This quote resonates deeply with me, because I truly think over the long-term that being a good person and doing the right thing for the right reasons is the best possible “strategy” for a successful life.  Sure, we see many examples of people in positions of power with insider information enriching themselves to the detriment of their stakeholders or constituents, but I contend that over a long enough time horizon this “success” will lead to a bankrupt life where it truly matters: relationships with family, friends and the people who trusted you. Taking a self-serving shortcut is a losing strategy, plain and simple.  Do the right thing. Community Q&A We’ve long called ChooseFI the “ultimate crowdsourced personal finance show” because you the community are able to bring us your wins, life & money hacks, and crucially the questions you have that need answering. We don’t have enough time on the podcast to come

Four Day Work Week I was fascinated by this Twitter thread from Bolt CEO Ryan Breslow announcing that: “Bolt is now the first tech unicorn to permanently switch to a 4 day work week Our 3 month experiment proved every core thesis: Heightened 1/ Productivity2/ Engagement3/ Wellness” Breslow’s thread is worth a 3-minute read, as I strongly suspect more companies will move this way in the future, and I know we have a lot of business owners in the community who likely should be contemplating this change. I never understood the concept of being stuck at an office for a certain prescribed length of time if I could do the work both well and in a shorter amount of time.  You shouldn’t penalize your best employees by forcing them to “work” extra hours than is necessary to complete their tasks. Breslow summarized their learnings from this experiment (quoted): Learning 1: More days doesn’t mean more done Learning 2: Focus predicts success Learning 3: Creativity is the holy grail Learning 4: Everyone’s more present Learning 5: We are happier Brian Feroldi Book Launch We are excited to announce that our latest book from Choose FI Publishing is now available for pre-order everywhere books are sold! Written

Annual Financial Checkup Happy New Year! It’s hard to believe the holiday season has come and gone and now we’re gearing up for 2022. Jonathan and I released Episode 358 of the ChooseFI podcast yesterday and even though we titled it the “Getting Started Audit” it just as accurately could have been the “Annual Financial Checkup” which I think we all need. Give the episode a listen, as it’s a real back to basics look at your financial life and why it’s so important to do at least an annual review of your: Jonathan mentioned at the end of the episode that I would link up our discussion of the Checkpoints of FI, which is pertinent to your FI Number and where you are on the path to FI. Give our Episode 324 ‘The Stages and Checkpoints of FI’ a listen as part of this annual checkup. As always, pursuing FI is all about taking action! Do the work now and move forward confidently with your financial plan. Is Your Home Properly Insured? I read an article in the Washington Post this past week about the rising cost of homeowner’s insurance and I thought it was important enough to mention in the newsletter this week. My

Help to Cut Down on Distractions Last week I included a Twitter thread (I’m on Twitter and would love for you to interact with me there) on how to get better at email. It focused mostly on keyboard shortcuts and processing emails quicker which is really helpful info, but I’d suggest two quick life hacks for you that have cut down on my phone & email stress significantly: Go into the settings of your phone and app-by-app shut off notifications until you are left with only the truly essential notifications.  For me this is only two things: phone calls and text messages.  That’s it.  All other notifications are gone, so no distractions every time I get an email or social media notification. Ruthlessly unsubscribe from the likely hundreds of junk email lists you’ve signed up for over the years.  It takes just a small bit of intention to, instead of taking the easy, in the moment option of just hitting delete, actually open the email and scroll down to the bottom and hit “unsubscribe.”  Take the next month and every time a company sends you an email that you aren’t interested in any longer, just scroll to the bottom and unsubscribe.  You’ll be amazed at how many fewer times a

Year-End Move We’re Making I confess that I hadn’t heard of the US government issued ‘I Bonds’ until Mike wrote me this response to one of our discussions on the podcast: “I got a good chuckle over the part where we speculate that Fritz is selling bonds because they are doing soooo poorly. Check out bond fund ‘TLT’ this year. Better yet, check the I Bonds rate as of 11/1 and let me know how badly that fits into a plan. “ Then I saw this CNBC article last week about I Bonds entitled “Couples can fight inflation with 7.12% risk-free interest on $40,000 with this year-end move” and my interest was officially piqued. I never give financial advice, but just try to pass along things we’re doing personally and I can say that I’m moving forward opening an individual account for both Laura and me and funding each with the max $10,000 per person in 2021 and most likely again in 2022 with a similar amount. The interest rate changes every 6 months on these I Bonds, but with inflation at a higher-than-normal level and that being a component of how the return is calculated on these bonds, I

No Shortcuts (In Life or FI) “There are no shortcuts in this game (of life). Everyone wants to buy the shortcut, that’s how Men’s Health magazine survives.  No one wants to hear just go to the gym 3 times a week and lift some heavy things and then sleep 8 hours. There are no shortcuts.  The shortcut is to be consistent.”       – Pro poker player Chris Sparks on the Jorgenson’s Soundbox Podcast This quote reminded me so much of the FI Mindset of long-term thinking, consistently putting in effort and doing hard things. There’s no get rich quick scheme that’s going to work miracles, no 5-day fitness program that will get you strong and healthy. You have to do the work, consistently, over years and decades. And there are going to be hard times, and periods where it feels like you’re not making progress, but with that long-term mindset and knowing there are no shortcuts, you’ll always have a North Star to guide you. Sleep Optimization & Sunlight Exposure I focus a lot on sleep optimization in my own life, as it is becoming clear that sleep is one of the biggest determining factors for performing your best. Dr.

What are you Trying to Master? With the help of author Daniel Pink’s framework, we’ve identified five main motivating factors that drive much of human behavior:  Autonomy, Mastery, Purpose, Identity and Connection. I want to focus today on ‘Mastery’, as I think this aspect of motivation often gets overlooked entirely. Sure, many students and those early in their careers are consciously pursuing knowledge and mastery, but honestly, how many older people are actually trying to “master” any new skill or learn anything new at all? I think the answer is just about nobody. Routines turn into ruts and we just don’t have the energy, time or motivation to even attempt to learn anything new. I know I was guilty of this for a solid decade of my adult life.  But something shifted and I now relish the “white belt beginner’s mindset” which amounts to being terrible at something but soaking up all the knowledge I can with a long-term goal of attaining some level of mastery. I still have a long way to go, but just in the past five years I’ve taken up weightlifting, Brazilian Jiu-Jitsu and the Japanese language. It’s motivating knowing each is a long-term effort that may take

Simple Tips for Online Security I recently chatted with a friend in the cyber security field about some of the common-sense online security practices I follow, and he thought it was a good 80/20 analysis of low-hanging fruit to get the vast majority of the benefits of being safe online without it being overwhelming.  There’s always another rabbit hole to dive down in online security (VPNs, throwaway email addresses, etc., etc.), so this is not an authoritative list certainly, but just some smart practices you can implement today to be a little bit safer: Turn on Two-Factor Authentication (extra login security notifications, etc.) everywhere possible.  This includes all financial sites, plus high value accounts like all your email and social media. Use a highly regarded password manager such as Lastpass or 1Password and take the time to update every password so it is unique and generated with 20+ characters, with symbols, numbers and letters. Then make sure your “master password” is something you’ll never forget but is as unbreakable as possible! Do everything you can to NOT click on links in emails you receive purporting to be “official” emails. These ‘phishing’ emails are quite sophisticated so even if they look official, I just

10 Things I’m Thankful for in 2021 I thought it would be fun during Thanksgiving week to highlight some things I am thankful for.  Practicing gratitude is one of the keys to happiness, so I wanted to take this chance to share ’10 Things I’m Thankful For’ with you: 1.     My daughters’ amazing teachers and coaches: We are so appreciative of what these teachers and coaches do for our girls on a daily basis. Teachers and coaches work hard every day to ensure our kids have a happy place to learn, grow and thrive and this year with all the additional challenges, it’s especially important to thank them. 2.     Low-cost Index Funds: With the click of a button, and for almost zero fees, I get to become a partial owner of 3,000+ companies.  This would be almost impossible to do without the index fund revolution. 3.     Automated bill-pay: Not sitting down every month to write a bunch of checks, making sure I have stamps, and not missing any deadlines.  This frees up so much mental space. 4.     My incredible wife and kids: Words can’t do justice to how thankful for and lucky I am to have these three ladies in my life. They bring me

2022 Limitations for 401k, IRA & HSA This week I came across an article from CNBC describing how the IRS increased the 401k contribution limits for 2022 plus one from Kiplinger’s on the 2022 HSA limits. While I suggest looking at both of them in more depth (especially if you’re 50 and older as you have the opportunity for additional contributions to some accounts), the highlights are: 401k contributions: Employee contributions increased to $20,500 for 2022.  Per the article, “The new amounts also apply to 403(b), most 457 and Thrift Savings Plans.” IRA contributions remain the same at $6,000 HSA contribution limits for 2022: self-coverage = $3,650. Family coverage = $7,300 Mad Fientist Quote on FI It’s a rare treat when Brandon, the Mad Fientist, posts a new podcast episode and his release this week didn’t disappoint.  This quote jumped out to me immediately: “For me, back then, it (FI) was a finish line.  Everything was going to be great after that finish line and everything wasn’t working prior to that finish line.  And I think that was definitely the wrong way to do it. I think the more you can view it as just a spectrum where every dollar you’re saving is adding to that power

Year-End Tax Planning It’s hard to believe how quickly 2021 is coming to a close – December 31st will be here before you know it and that means it’s a good time to make sure all your year-end tax items are in order.  Our good friend Sean Mullaney, the FI Tax Guy, put out an updated ‘2021 Year-End Tax Planning’ article with all the deadlines and considerations you need to be aware of for both 12/31 and future deadlines for tax year 2021. Everything in the article won’t be applicable to you, but I got great value out of scanning the article to make sure I had everything covered ahead of time. My suggestion is that your 5 minutes of FI action this week should be to click on Sean’s article now while you still have time to make changes and plan ahead.  This could potentially save you thousands! Mental Models: Cost -Benefit Analysis Our ChooseFI website team continues to put out high-quality content that not only highlights the fundamentals of Financial Independence, but dives into the mental models you need to succeed at life. Ray wrote a masterful article on “Cost-Benefit Analysis and Financial Independence” that we published yesterday.  As a former poker player, he