Updates & Inspiration for Your Financial Independence Journey

Tax Gain Harvesting Ava wrote in: “I feel like a lot of your guests talk about tax gain harvesting as something to do only when they quit their jobs and have no income, but I took advantage of it while I was still working. When I was making about $50,000 in 2020, the taxable income limit for getting the 0% long term capital gains rate was $40,400 for single filers. The key word here is taxable income. I took $50k of gross wages and subtracted the $12,400 standard deduction for a single person and my taxable income went down to $37,600. I also realized I could reduce my taxable income even further by maxing out my 401k which reduced my taxable income by another $19,500. My taxable income was now only about $18,100 – meaning that I could sell and rebuy appreciated stocks and mutual funds in my brokerage account and not pay any federal taxes on about $22,300 of long-term capital gains in 2020. I did this for a few years while I was making a sufficiently low income to get under the threshold. Given the 401k max and the standard deduction I would encourage any single person making

Check Engine Light DIY Fix The FI Designer from DesigningFI.com wrote in with some important info: “In Episode 402, Vivian said that her car had an engine replacement and an ongoing engine warning light was adding stress to her life. I wanted to share some advice that may help Vivian and the greater FI community. You may feel powerless when your vehicle’s engine warning light comes on, but there are steps you can take to lessen the dread by purchasing/borrowing an On-Board Diagnostic (OBD) reader. An OBD reader will tell you what the error code is and how severe it is. Some readers even give you links for purchasing the replacement part on Amazon which is valuable in estimating the repair cost. The OBD reader will also give you the ability to reset the error code to turn off the warning light, but the light will come on again if the issue persists. This is a case where knowledge is power. My post, the ‘Financial Benefits Of Being Handy’ discusses the OBD reader in greater detail. They are remarkably inexpensive, starting at around $30 on Amazon. I chose the BlueDriver Scan Tool at around $120 because it had slightly more advanced functions,

2023 IRS Updated Limits and Deductions The IRS just came out with the tax year 2023 update for a few essential items, which were all favorably adjusted: Free Course on Creating an Extraordinary Life I recently had the pleasure of recording an episode with Alan and Katie Donegan on the topic of index funds, which will go live in about a month (that will be a great week of podcasts starting with a JL Collins episode releasing on Monday and the Donegan episode on Friday!). They told me that to celebrate the 10th anniversary of Rebel Business School they are launching a 100% free course on creating and designing an extraordinary life for 2023 and beyond and wanted to make sure the ChooseFI community knew about it as early as possible. It is called the Extraordinary Life Course and it starts November 21st so sign up today to get registered. Per Alan it is “One session a week for 5 weeks, 90 minutes each session, with a new topic each week.” They premiered this course at the Mr. Money Mustache HQ and in Colombia at Chautauqua, and this is the first time it’s going online, so this is a very cool opportunity

ChooseFI Book Club Ginger wrote in with a great idea of doing a ChooseFI Book Club and I jumped on it. The first installment is tentatively going to air on Friday December 16th. The book we picked is ‘Four Thousand Weeks: Time Management for Mortals’ by Oliver Burkeman, which was recommended by numerous members of our community and seemed like the perfect place to start. The plan is for me, Ginger and Josue (another community member whose story you’ll hear on the podcast in a few weeks) to talk through the book, our big takeaways, and actionable items. But it wouldn’t be a book “club” with only 3 of us, so I’d like to get you involved as well.  Grab the book from the library and join us! Send me an email response or send in a Voicemail with your big takeaways on the questions we’re pondering: We’re recording in early December, so you have some time to read the book and pass along your comments and feedback. This is an experiment, but if we like this format, I could see us doing a handful of these Book Club episodes each year! Library Hacks With the book club upcoming, this is a great time to remind

Deep Dive on Social Security Benefits I received a helpful email from Matt, who researched a really important topic we honestly haven’t done a wonderful job covering at ChooseFI:  Social Security benefits. Here’s what Matt sent in: “I went down a rabbit hole and learned how to more accurately estimate my social security benefit by accounting for future pay raises and using bend points forecasted for the year you are eligible for Social Security. I want to share with the community the following articles I found most helpful. Households of FI Series Returns If you’ve listened to ChooseFI the last month, you may have noticed a few changes including, by popular demand, the return of the Hot Seat! What I’m super excited about now is the return of the Households of FI series.  This was a series where we followed a group of FI Households as they began their FI journeys, and checked in with them every few months to see where they were, celebrate wins, answer questions and provide accountability. I actually released a Friday episode this past week featuring the first of those Households, Troy & Lindsay on Episode 398.  Take a listen and follow along with their story and the rest

Taking Action: Online Security On Episode 397 that released yesterday, I spoke with Tom, a longtime FI Community member, about common sense steps you can take to secure your online & financial life. Today is the day I challenge you to take action to make it happen! At the very least, if you don’t have secure passwords, a password manager and Two-Factor Authentication on every one of your financial logins (plus your email accounts and social media), you need to do this ASAP. Listen to Episode 397 and take action! Taking Action: Net Worth Tracking The 3rd quarter of 2022 just ended and that means it is time to track your quarterly net worth.   The fact that it was an ugly quarter with market performance makes it all the more important that you do this and don’t just stick your head in the sand. The path to FI is not just a straight line up and we know market volatility is an expected part of the process. Super simple to track your net worth:  Log into all of your investment accounts and write down the account balances.  This sums to your total assets. Then, subtract out any debts you have outstanding.  These are your total liabilities

Money Saving Tips from Laura Over the years I’ve mentioned a number of my wife’s money-saving hacks on the podcast and the community has always wanted more! Laura was kind enough to write up some tips for the FI Weekly: “Hello FI Weekly readers!  Laura here making a guest appearance and taking over the FI Weekly this week! I thought it would be fun to jot down a quick list of some of my tips for making your life with family a little easier, less expensive and less stressful: Google Chrome Safety and Essential Extensions A few months ago, I highlighted some essential tips and tricks to be more efficient with Gmail, and today I wanted to pass along 2 great twitter threads I found for the Google Chrome browser: My favorite little-known extension is called “Fast Dial,” which is basically a visual representation of bookmarked pages. When I open a new tab in Chrome, it is set so Fast Dial shows up instead of a blank tab or some other URL location. I currently have 27 websites bookmarked (from ToDoIst to our ChooseFI Facebook group to my solar panel monitoring login, and a whole lot in between) and they show up as tiles on that

The Cost of Admission for Investing Here’s a long quote from Morgan Housel, author of The Psychology of Money, with one of the best illustrations of the mentality needed for successful long-term investing in the stock market regarding normal volatility: “Anything worth pursuing in life, that has a benefit, has a price attached to it. The world is not so great that it’s going to give you great rewards and ask nothing in return. So, then, the question is, in investing, what is the cost of admission? You want great returns. Everyone knows that you can earn great returns in investment markets over time. But what is the cost of admission? A lot of investors cannot really answer that.  Or they will say something like, “the management fee that you pay to your advisor or broker.” That’s not the cost to investing. The cost of investing returns is putting up with and dealing with and enduring a never-ending chain of volatility and uncertainty and setback and disappointment. That’s the cost of admission. And this is so important because most investors, when their portfolio goes down 20 or 30 percent, they view it as a fine, and a fine means you did

What $100 a Month Truly Means In the ‘Community Taking Action’ section of today’s email (see below), Charity said her reducing $100/month in expenses “was not flashy” but I wanted to point out the immense value of every $100 reduction in life expenses: For every $100 reduction in monthly expenses, that’s a full $30,000 less in net worth you need to reach Financial Independence. Yes, $30,000 less! That’s massive. Here’s the math: Let’s say your life costs $5,000 per month, which is a total of $60,000 per year. We know to get your FI Number using the 4% rule of thumb that you simply multiply your annual expenses by 25, so your FI Number would be $1,500,000. Let’s now cut $100 out of this budget, so it’s $4,900 per month or $58,800 per year in expenses. $58,800 x 25 = $1,470,000. This is just simple math, so every $100 you cut out of your life is a reduction of $1,200 of annual expenses which leads to a $30k less you need to reach FI. Sounds pretty flashy to me! App That’s Improving My Life Jonathan told me about the Genius Scan pdf scanner app a few weeks ago, and it is making a

Return of the Hot Seat I want to take a minute to say a huge thank you to everyone who responded to last week’s FI Weekly!  With the news of Jonathan stepping back from the podcast, I was blown away by all the heartfelt messages of encouragement and gratitude plus all the amazing suggestions for future guests, topics and segments you’d like to see. I was shocked that so many of you specifically asked that I bring back ‘The Hot Seat’ questions we previously asked our guests at the end of the episode. I can guarantee it is 100% coming back starting with the next episode I record (happening today in fact!). One of the questions we asked was people’s favorite books and in anticipation of that question coming back, I wanted to pass along a remarkable resource that David at Runners FI put together: He combed through 500+ episodes to find every time a book was ever mentioned on the podcast to create a list called the ‘174 Must Read Books of FI.’ No surprise that The Simple Path to Wealth was the runaway winner for most mentions, followed by Your Money or Your Life and The 4 Hour Workweek. If you’re

Beginning of a New Era On the ChooseFI podcast Episode 392 that released yesterday, Jonathan announced that he’s stepping back as the on-air host of the podcast, and that would be his last episode. This is a ‘season of life’ change for him and he’ll continue to work on things behind the scenes at ChooseFI, so all is well certainly. This is bittersweet for me as obviously I’m bummed that he won’t be on the show with me, but it’s also exciting in the sense that the show is now mine to shape going forward. I’d love to involve you in shaping that future direction, as this has always been a crowdsourced show and I want to make that even more obvious going forward. So, here’s my request of you:  What would you like to see for the future of the show? Is there anything I should bring back from the show’s past? What guests would you like to see? What topics should we focus on more intently? Do you have an interesting story or are you facing challenges on the path to FI that you’d like to discuss on the podcast? Hit reply and let me know! What Have

Student Loan Forgiveness I wrote a note about this in last week’s newsletter and wanted to remind you: If you or anyone in your family has student loans, or you know anyone with student loans for that matter, Episode 391 of the ChooseFI podcast that came out yesterday with Travis Hornsby from The Student Loan Planner is truly a MUST listen. Like stop reading this email right now and go listen kind of important.Tell anyone you know with student loans kind of important. If you’ve read this email or listened to me on the podcast, you know I’m a sincere person and don’t hype things up.  This is essential info that could lead to 25% of all student loans ultimately getting forgiven. The Importance of a Legacy Binder My conversation with Dr. Jordan Grumet (Episode 390) on his reflections from a front-row seat as a hospice doctor to the regrets of his dying patients has made me think deeper about a number of truly essential things. Throw in an annoying sickness I had this week and it got me thinking about basic fundamentals of if I were suddenly not here any longer, would my wife and family know where all of our assets