The announcement of the new FI101 course! Plus a discussion of the power of community and the impact it can have on your finances.
Everyday Courage launched earlier this year. It is off to a great start! It is already in the top 200 in all podcasts and top 5 in the iTunes self-improvement category. Thank you to everyone that listened!
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Spreading The FIRE
Over the weekend, a friend of Jonathan's reached out for some personal finance assistance. Although he reached out with some specific questions, Jonathan sat down with him for 45 minutes to discuss the full picture of his finances.
Jonathan's friend shared his income, net worth, liabilities, and monthly expenses. After this, they discussed his goals for the future. Quickly, they discovered that he would like to have the option to work or not work in his mid-40s when he gets out of the military.
Together, they built a plan to tackle these goals. A lot of the information that Jonathan shared was seemingly small stuff to those in this community. After all, investing in taxable accounts and paying down consumer debt seems clear to us. However, not everyone is comfortable with their finances and it is very easy to forget that.
Jonathan was happy to share this information with his friend to help optimize his life. It served as a good reminder that not everyone is comfortable with this knowledge about FI that many of us now take for granted.
The Power Of Community
As James Clear shared, it is incredibly important to join a tribe where your desired behavior is the accepted norm of the group. For example, if you want to do better with your finances, then it is a good idea to join a group of people working on their finances.
Jackie from Monday's episode did just that. After growing up in poverty, she was determined to change her finances for the better. She took the initiative to join a finance invest group and it completely changed the trajectory of her life.
The power of community has been seen across the world in our ChooseFI local groups. It is a wonderful thing to simply have people to talk about money with. For example, the Richmond local group hosted a panel at a local library about spending less, earning more, and investing better. Over 40 people showed up and talked about their finances for hours.
I think that’s what’s so beautiful about these ChooseFI local groups is you have these kindred spirits, you have people that you know are built in, they want to talk about this, they want to support you.
Make sure to find a local group in your area! You can find out more about local groups here.
The ChooseFI International Foundation And FI101
We are excited to announce the launch of our FI 101 course. Stephen Heptig, joined the show to share more information about this project.
The goal of FI 101 is to help spread financial literacy as far as possible. Although some criticize the FIRE movement for not sharing this information enough, the ChooseFI International Foundation is working to change that.
In fact, the Financial Independence community, the FIRE movement, one of the biggest criticisms is that it’s not reaching the people that need it the most…FI 101 is our response to that calling, to that mandate. At least the first version of it. I know that we are very excited to actually see this exist in the universe and we both believe, as does our team, that this can truly impact this world that we all live in.
Stephen got started with spreading financial literacy after turning around his own financial life. He found that books like The Simple Path to Wealth and The Richest Man in Babylon completely changed his outlook on his finances. Since he was in the military, he could easily see that many of the financial resources available to members were going underutilized. So, he found a way to start teaching personal finances for his unit. It started with giving a few talks during mandatory training days. If anyone continued to ask questions, then he handed them a copy of The Simple Path to Wealth.
Stephen started teaching his unit about personal finance about four to five months before starting to work on FI 101. At first, he started working on a military-specific version of FI 101, but decided to make a broader civilian course to get started. In the future, there will be a military-specific version.
After many hours and iterations based on feedback, the FI 101 course has videos that match up to each lesson. It takes the information in the podcasts and outlines the path to FI in a very linear format. The style of the course is very similar to a classroom setting. There is an opportunity for students of the class to ask questions in a forum setting to expand the classroom feeling.
If you or someone you know could use the information in this course, please spread the word! FI101 exists but it needs help to spread the information. We need your help to get this information into the hands of people that need it the most.
The course is completely free through the nonprofit. If you are interested in taking the course, then you can find it here.
If this sounds like something that you want to take part in or you want to help spread, please we need your help. This is something that’s free and it can genuinely help people in your family, at work, in your community. And it’s as simple as just sharing that link: ChooseFI.com/FI101
The military version of the course is coming soon. If you have questions for Stephen, then you can reach out at [email protected] He will be happy to share that course with you when it goes live.
If you are interested in making an impact at scale, then consider donating to the foundation. The mission is to spread financial literacy as far as possible. The easiest way to donate is on the ChooseFI International Foundation website. Jonathan mentioned that the ChooseFI International Foundation even made Mr. Money Mustache's list for charity donations this year.
Let's see what MK has to share from our community.
Justin wrote in to ask about his HSA. His employer told him that the contributions for the first pay period are going to be skipped for 2020 because there are 27 pay periods. Also, they will only allow him to contribute $300 per paycheck which forced him to miss his max in 2019. He wanted to find out if this was legal and what to do about making up a contribution.
Jackie from this week's episode is an HSA expert who wrote in a great response. She said that there is no IRS mandate on the frequency or the amount of a contribution. However, employers are expected to make sure that the employee doesn't over contribute to their HSA. With that, it is legal for Justin's employer to skip one paycheck contribution in an effort of caution.
Since this is the case, Justin could make the remaining contributions to his HSA directly from his bank account to the HSA to hit the IRS max. If he is unable to do this with his current HSA, then he could open up a secondary HSA to hit the match. Just make sure that you document this in your taxes and account for the FICA taxes that could have been avoided if you went through payroll.
This year, you can contribute $7,100 to an HSA as a family or $3,550 as an individual. If you have any HSA questions, you can contact Jackie. You can reach her at [email protected] Also, Jackie shared many resources on the show that are now in the vault!
Updates To The Tax Code
You may have heard about the SECURE Act which refined and adjusted tax revenue. It mostly affected the FI Stretch IRA.
Sean, the FI Tax Guy, called in to share his thoughts about the SECURE Act.
Although the changes make an impact on your heirs, it doesn't impede your ability to achieve FI. The big changes included that anyone over age 70.5 can now make traditional IRA contributions which could help those working on back door Roth opportunities. Additionally, you'll have to start draining these accounts through RMDs (required minimum distributions) at 72 instead of 70.5.
The major change is that there is an increase in the tax for inherited accounts. In the past, you could stretch out your retirement accounts into your beneficiary's lifetime. Now, most beneficiaries will need to take out the RMDs over a ten year period. With this, the best people to leave your retirement accounts to are your spouse, minor children, and anyone that is disabled or chronically ill.