Chris Mamula on Affording a Life You Don't Want to Retire From

Living a life in full is a conversation you always wanted to have with that person who gave an amazing TED Talk or the author of one of your favorite books, or that inspirational Olympian you always wanted to know more about. It's graduate level conversations with those making a difference in the world and in the lives of others. This show brings you new ideas and approaches so that you can live a life in full. I'm your host, Dr. Chris Stout and I hope you enjoy this episode. This episode is brought to you by the new fellowship and certificate programs now being offered by the center for Global Initiatives. As you may know, the center is an all volunteer organization and the same is true for the faculty in these programs. So all the tuition goes to support the work of the Center. It has always been our ethos to open source humanitarian intervention and these programs use the same approach in that all the materials we use are freely available all the time to anyone, everywhere, even if you don't take a course. We have built a world class faculty and contracts with other universities, medical schools and partnered NGOs. There are two fellowship tracks, one for those wishing to start their own nonprofit or non governmental organization and one for those seeking mentorship for career development and advancement and humanitarian work. Our initial certificate programs include humanitarian intervention, social entrepreneurship and global health practice. Please consider taking a world class masterclass with us. Visit alifeinfull.org and click on the CourseWorks tab to learn more. Thanks welcome to another episode of Living a Life in Full. I'm your host, Dr. Chris Stout. Chris Mamula used principles of traditional retirement planning combined with creative lifestyle design to retire from a career as a physical therapist at age 41 after some bad experiences with the financial industry. Early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design in Can I Retire Yet? Where he writes about financial independence and expands the conversation around what retirement is and can be. His articles have been featured in Market Watch, Morningstar, U.S. news World Report, and Business Insider. And he's also the primary author of a new book called Choose Blueprint for Financial Independence, which we'll be discussing in depth in this episode. Welcome to the show, Chris. It's great to have you on.

I'm excited to talk to you. Thanks for having me.

You bet. So your work in your life actually provide a nice kind of rounding out about some of our prior financial guests. You and I were talking off mic beforehand. I mean the show has had private equity Investor Brian Cressy. More recently we've had Guy Spear. He was talking about his hedge fund and decision making processes and the investment areas. Most recently also William Green on his experiences with working with a variety of investor superstars as a journalist. So maybe we could start off with sharing your story, then we can dive into the book and then deconstruct all the various approaches and mechanics and things to financial independence. But I know a lot of the listeners will be familiar with a lot of the popular acronyms of FIRE and fat, FIRE and Lean fire. I also in my research for this I found ERE Early Retirement Extreme and ESI Earn Save Invest. And from your book and FI and fflc. Can you maybe just step through in any order that you like, some of the acronyms so that people will understand what it is that we'll be talking about?

Yeah, so I mean I think the big one is fire, Financial independence, Retire early. That's kind of gained a lot of steam and attention in popular media over the last couple of years. And honestly I think a lot of the other, like when you get into these acronyms and things, I think personal finance is so stinking and confusing for most people and it's a turn off. So I think maybe the better way to go is just to steer away from a lot of these terms that just kind of like get people's mind going in the wrong way. And what I really try to focus on with my writing in the book and on my blog is really how do you make personal finance simple and enable just normal everyday people to be able to apply these principles in a way that makes sense for their life? Because I mean, I know from my personal background I was trained as a physical therapist. So I mean my parents really pushed academics on me. So I was a very good student for 12 years through high school. And then I had a bachelor's degree and a master's degree and I went back and got a transitional doctorate in physical therapy. And in like 17, 18, whatever years that totals up to of school, I had absolutely zero classes relating to personal finance. So you spend all this time learning how to make money and then I had no idea what to do with it. So I basically stumbled and bumbled through the first decade of my career just thinking personal finance was overwhelming. And so at this point I really like to make it simple and so people can do the big things correctly and then just go on living their life. Because I think that's what it's really all about.

I think that makes it such more of a Doable approach. I mean, you even hear the term financial literacy, you know, which is, I think, you know, obviously the point that you get through with your work and with your writing. And it is kind of a funny thing I did. You know, you and I are kind of in similar professional academic tracks, different trajectories, but similar approaches. And I remembered I went through a research based, but also very applied based kind of clinical psychology program and I graduated and you know, felt like I have no idea for. I don't know how similar or dissimilar it is to physical therapy. But a lot of psychologists kind of their goal is to be an independent private practice or in a group practice. And we had zero classes, you know, on that, let alone our own, you know, financial, you know, kind of like how do you manage your money if you, if you have the opportunity to make any money? So I also see in the popular media, I guess maybe we'll, we'll take some pokes at some of these other sacred cows and Alphabet soup stuff. But like, I'd like you to walk us through your story. I know that you had some not so great experiences kind of starting off, which I think is very common for all of us. And like, but you also hear like, like people. I remember there used to even be like a commercial, like people having a number. Like there used to be. I remember these visuals of someone walking around with like this little digital sign on their shoulder of, you know, that was their number. And once they hit their number then you know, all these magical things and unicorns and butterflies would happen. But when you were looking to like even thinking about, hey, can I retire early? Could I retire at 41? Did you have a number or kind of what? Tell us about the gravitational pull of how you, I'm guessing you came to that decision and then you kind of maybe worked backwards and then deconstructed and then work towards it or what was it like for you?

Yeah, I mean that's a great question. And it's, it was an evolution. So I think like most people. So my wife, I was a physical therapist and my wife, she has basically she started just with a bachelor's degree in math and then she went on to get an MBA and a degree in operations research. So we both had relatively normal jobs making high five figure salaries. Never made six figures, either of us. So we were making above average incomes and, but really didn't, you know, not the type of. Weren't cashing out on a startup or professional athletes or entertainers or anything where you could Think you could retire at 40? That just seemed unrealistic. And so we really had no goal at all. And we were just natural savers and kind of drifting along. And we talked a little bit before we started recording. But similar to you, like, we have an interest in outdoor activities, and we kind of developed this mindset of, in climbing, there's a term being a dirt bag, right? Or in skiing, you hear, like, ski bumps. And it's these people that they don't really care about money, and they're just pursuing their passions. And there was an element for both my wife and I, or that was really appealing. But then we both grew up in families where we didn't have a lot of money, and we both went through school living, you know, like, I lived in an apartment when I was in school. I had roaches, and I knew what it was to be poor, and that wasn't very appealing either. And I saw these people who. These dirt bags and these ski bums. And, yeah, they were kind of living their passion, but also they were one injury, one accident, one car breaking down, even from financial disaster. And so we knew we didn't want that either. And so we kind of created this little term for ourselves. We called ourselves being dirtbag millionaires, meaning just we were going to kind of, like, live our values like these dirtbags were, but we wanted to have some financial security. And so kind of our idea was so my wife kind of backing up a little bit. We didn't think that she was able to have children. And so our. To that point, that was enough. And we didn't have a number. It was just kind of a gut feeling.

So you were saying your wife then got a position at Black Diamond?

Yeah. So she got a job offer, and this was, like, kind of a process. As she was going through the interview process, that took about six months. And in the time that from when she started interviewing until she got her job offer, we found out that she was pregnant, which was a huge shock for us. And so at that point, we kind of realized that, you know, we had another human that we were responsible for, and just kind of winging it and flying by the seat of our pants wasn't gonna work. So, honestly, I kind of had a little bit of a panic, and I didn't know what to do. And I just started. I was just looking for everything. And I think one day I Googled, like, Extreme Early Retirement. And I came up on this blog called Early Retirement Extreme, which, if anyone's ever seen it, it lives up to its name. It was very extreme, but something about it started resonating with me enough that I kept looking for other blogs and other ideas and I fell down this rabbit hole of fire. Financial independence, retire early. And that really changed my life. And so at that point I did kind of have a target get that, you know, if we had this number X, that once we got there we would be financially independent and we wouldn't have to work anymore. And so we really started to pursue that pretty aggressively.

Were you, were you still in as

I was doing that?

Sorry. Were you still practicing as a physical therapist at that point?

Yeah. So I mean, we had always been saving again, we were kind of natural savers. We had relatively frugal hobbies and we made above average incomes and we had no kids there for a decade. So we were able to save a lot. So we had a lot of foundational things in place. But yeah, we never really had a plan. I was still working and we were saving as we were building out our plans. And that's when I started writing about this concept because I was kind of like, it was so life changing and it was kind of like could I A, hold myself accountable by writing and then also B, maybe other people would find me and I could kind of pay it forward. So that's kind of how I got into the blogging. So side of things.

That's cool. So at what point, like, what was it like? So now you, you guys are expecting, you're still wanting to have a financially independent lifestyle. So did you. I mean, I, I'm thinking about this as, as parents too because there's a point in time, in my background, my wife's background, she's also a clinical psychologist where we were just basically kind of stitching together consultations and I had some academic teaching positions, but they, you know, didn't come with benefits. Having kids is kind of a game changer. It's one thing to be kind of like, you know, the dirtbag climbers and living out of your van, but it's another thing, you know, when you've got this other, you know, person responsibility. So like did you have insurance at that point in time or step us through, like how, how do you have a baby and the circumstances that you guys experienced.

Yeah. So as we. So this is all kind of happening around 2012. Okay. And so what we started to do was just kind of figure out, okay, what can we do? What do we want to do? But we're both working full time at this point. Ok. And I would say at that point in Time. So again, we were kind of saving pretty aggressively just for this kind of dirt bag millionaire thing we invented, which didn't exist. This lifestyle.

I love that.

So we kind of, we, I think we were either had or were very close to having our house paid off. And we were basically, what we were doing was living off of my wife's paycheck and saving my physical therapy, my entire salary for a decade. So, I mean, we had a six figure portfolio and we had a paid off or very close paid off house, but no real idea of what we were doing. And so at that point I started doing deep dives into how do you invest, how do you start thinking about tax planning, how much money do you need to retire? Is, you know, like, I'm reading these fire bloggers. A lot of them are anonymous with writing, with synonyms or like fake names. And I'm thinking like, you know, anybody can write anything on the Internet. So it's like, is this even true?

Show me your checkbook. Yes.

Like, kind of thinking like, does this make sense? But the more I started looking into academic research and things, I mean, everything kind of checked out and it made sense. And so, yeah, that's when we got really serious. But it took us from 2012, when I started finding this stuff, until I left my job in December of 2017. So it's like a five year process where we went from basically being, I wouldn't say financially illiterate, but for the technical aspects, yeah, we were pretty close to kind of feeling very confident with a plan and I was willing and able to leave my job.

That's great. And did you like, you know, obviously people can do this as just an inn of one, one person, but as a coup. And then as a family of three, were you guys kind of in sync with this psychologically? I mean, I think that's a brilliant idea. And to be able to, I tip my hat to you, to be able to live off one salary and have the discipline to, you know, to save yours. You know, one of the classic reasons people get divorced, I mean, using my psychology background is because, you know, around finances. So how did you guys. Did you have a difference of perspective or just, you know, hit it? Lucky that you both had a similar worldview on how to handle money and what your goals were, you know, so

that, that's a really, it's a great question and it's an interesting aspect of my personal story. But I think for a lot of people, the challenge is, you know, one person might hear this message and say, all Right. This is, this sounds appealing. We could save 50% of our income and, you know, what do we have to do to do that? And then you go to your spouse and they think this sounds absolutely insane.

Are you crazy? Yeah. Yeah.

So like a billion. A big advantage my wife and I had is from day one, we were kind of on the same page. I grew up in a family that was very debt averse, and she grew up in a family that their family just struggled with finances without getting too much into detail of what that looked like. And so I approached her knowing that she had some because she put herself through school. She worked full time while going to school full time. And so I knew she wasn't irresponsible by any means or living frivolously, but she did have some debt from student loans and a car loan. And we were planning to get married. And in my family, like, debt was like a four letter word, right? And so I just approached her and we kind of just sat down and we came up with a plan of like, how can we be debt free by the time we got married? And what we established is we were going to live off of her salary and kind of develop a lifestyle. So she was working one year ahead of me while I was finishing physical therapy school, and how could we live off of her lifestyle? And then anything I was making. So I was working part time while going to school. We were just going to throw everything in the kitchen sink at her debt. And we did that for basically a year after we developed this plan, and then within my first professional one or two paychecks that kind of finished off the process and we were debt free and we were living pretty happily. And so we just continued doing that for again, 12 years, not knowing what we were doing, but just because it worked. So my paycheck always went to paying extra on our mortgage and investing without a real goal or plan.

I know it doesn't fit necessarily, I know it doesn't fit necessarily for all of our audience, but it just sort of, again, reminds me, I mean, we're identical cousins here, Chris. The, you know, my wife and I, like, sort of like when, when you put yourself through school or when you're going through school or graduate school, it's like, you know, you know, that you generally know or at least for us, this is what my wife and I, you know, how we made it through. We knew that we hoped and we told ourselves. We knew that it was time limited. And you get, you know, I got very used to, you know, I had a $500 R pickup truck. You know, that's how I got back and forth to school. And that was, that was before, you know, I had a bicycle, you know, so that was a, that was a step up for me. So, you know, and it's. It. I think if you kind of get in those, you know, non grandiose, non getting out over the tips of your skis kinds of financial circumstances, it's not, it doesn't feel quite the hardship, you know, that if you were in a different circumstance, you know, if you're used to something a bit more posh than, you know, what undergrad or graduate school, you know, might feel like, that it makes it more difficult. That's. That's a great way, great approach and great way to do that. So, like, tell us, step us through that point. Like when you both kind of did the math and looked at the circumstances and said, hey, I think we can do this. Did you, did one of you leave your position first and then the second one, or tell us, step us through the actual transition process?

Yeah. So I kind of talked about how I had no idea what we were doing.

Right, right.

That was both a blessing and a curse. So the curse side was like, and if we want, if you would like, we can kind of dive into some of the mistakes that I made with investing and tax planning. But the blessing side of not knowing what the heck we were doing is we didn't have that magic number. We weren't like, so fixated on this goal of, you know, we will get to retirement and then we'll be happy. So while we were saving 50%, so we started, we basically built a lifestyle that we could support on my wife's income. And so we had a relatively small mortgage. And as our incomes grew, our lifestyle grew even as we were continuing to save 50%. So we were living extremely well. We talked a little bit before we started recording, but like you, my wife and I got into high altitude mountaineering. So we went to Africa and climbed Kilimanjaro. We went to Ecuador and climbed a couple of the volcanoes there into Mexico. We've been to Australia and dove the Great Barrier Reef. I mean, we were living an amazing lifestyle while saving 50% of our salaries. And so we were always on this, and this was kind of easy for us. And then we got to this point so as we found this fire movement. So the idea is you save 25 times your annual expenses. And that's based on something called the 4% rule, which isn't 100% a great thing to plan on, but it gives you a true north to know when you have enough. And so as we started approaching this and thinking we had enough at this point, suddenly, after not having a lot and getting along great for 20 years, we started fighting about money when we had more than ever. Because for me, I was always saving with the idea that, yeah, we're going to go on and do something else. And as we kind of got close and started thinking about pulling the trigger for my wife, it was like a freak out moment of we went from saving 50% of our income to now spending down the assets we worked so hard to build. And it was terrifying. So it created this tension and this rift between us. And so for a couple that never fought about money for 20 years, now all of a sudden we're fighting about money. So it was pretty, it was pretty interesting. And it's something we definitely had to

work through that is, you know, that's really a good point, that mind shift or, you know, to kind of going from, we're saving, we're saving, we're saving. And like, okay, we've hit whatever point it is that we've hit, you know, not necessarily the arbitrary number, but we've gotten to the point that we've been working so hard for. And then to like, just start to feel like it's, you know, it's like it's Sisyphus or something, you know, like it's all eroding now. Like, wait a minute, I don't want to take any money out. You know, I've gotten into this habit of, of putting it in. So maybe like, talk about that. So do you live off your investments or do you wait till dividends are paid and you do that? I mean, I know there's like the classic 4%, and I want to drill down into this in a little bit. But to start with, like, when someone says, yes, I am financially independent, is it living literally, like off investments? So do you sell a stock or do you sell, do you just recoup, like, you know, pocket the gain, the dividends or like, and do you do it like, do you take 4% out on January 1st and that sets you for the year? I mean, I've read a lot in these areas and no one's ever answered these questions for me. So it's sort of like I'm like left with, well, if I really wanted to do this or if I really thought it was possible, what are those kinds of mechanics? So. And again, I know you and your wife are like an N of 2. But what's the approach that you found has been helpful for doing this?

Yeah, so that again, that's a great question. So on paper, yes, exactly what you said. So say you the 4% row. So say you're going to spend $40,000 a year just because the math is really easy. So then you have a million dollar portfolio and on January 1st, you take $40,000 out, which leaves you with like 960,000. And then theoretically over time, more times than not, that's going to grow. So here you can again take 40,000 plus inflation and then you just keep doing this forever and you shouldn't run out of money. And on paper that sounds really good and it works really nice. But in reality, to get to that point where you have a portfolio that can sustain you at the age of 40, you're a natural saver, right? And saving feels good. It's kind of like losing weight. Like, yes, you can go on a crash diet and sustain that for a month or maybe a year, but you're going to probably revert back. And so to be healthy, you have to develop a lifestyle that you're comfortable with and you like that lets you maintain a weight. And it's the exact same thing with your finances. Where we are comfortable saving, we are comfortable building wealth, but it's scary to be spending down. So yeah, we started with the idea of when could we retire and when do we have enough? And that was the plan. We were going to kind of follow that. But as we got close and started realizing, like, this doesn't feel good, this isn't what we wanted to do, so we really started thinking, and this is probably a better, healthier place to start is what do you actually want your life to look like and how do you build this life that you don't want to retire from? And so for my wife, what our financial independence, our growing financial independence let her do is around a couple years into this, as we were kind of hitting this wall, she had somebody that reached out to her and offered her a job for a company that was just starting up. And it was fairly risky because the company was just a few months old. But it kind of gave her an opportunity to ask of, like, what would be everything you would want and the worst they could do is say no. And so she asked like, can I work from home? Can I work part time? Can we get our health care? Like we were thinking about what are all the things that would make life better?

Right.

He basically said yes to everything. So she continues to do that now she continues to work part time for this company. And we live, we moved to Utah and we live in the mountains of Utah, but she works for a company out of the Washington, D.C. area. And then for myself, I kind of mentioned, like, people will say, like, you should do something that you would do for free. And I was writing for free. Like, I never made a penny for the first four or five years. And I was just passionate about this topic of financial independence. And I was like, well, can I make money? I know some bloggers do. And so slowly over time, I've been developing this into an income stream. And so I wrote a book that we now sell and I have some advertising in my blog and. And so I also have some income. So basically where we are now is we don't necessarily save month to month and year to year, and we don't necessarily spend much of anything out of our portfolio year to year. But we've kind of just kind of found this equilibrium where we can work not a whole heck of a lot. So we have a lot of the lifestyle advantages that we wanted from retirement without all that fear and scarcity that comes with drawing down your portfolio. So that's how it looks for us.

I think that's a great strategy. I mean, I think nowadays too, there's such much more of an openness. I consult and impartial of some other startups and one of the epiphanies at one of the companies I work with was that they always kind of thought they always had a difficult time recruiting coders and there was such competition for it in their space. And then whoever the coder was had to move to Chicago. And maybe some of the best coders didn't want to move to Chicago and couldn't afford to live in Chicago. And then it was like, well, then you got to pay them more and then that created problems for the company. So with COVID it kind of created this opportunity where everybody had to work remotely. And it gave this, you know, insight to the CEO that, oh, life is going to be much easier because I can recruit talent. Probably like what your wife's experience was to be able to, you know, to work anywhere, get the job done. No one cares necessarily where you're sitting, when you do the work, or necessarily what time of day it is when you get your tasks completed. So I think that's really good. And I, I probably should have said earlier on, I really like from your writing and from the book, the whole idea of, you know, having the life you want. I mean, I Think it's almost like the cart and the horse, you know, it's sort of like, well, the money then leads to the life or the life, you know, then requires this amount of money. But I think you guys are a good model of it and inspiration in the sense of being able to have. I don't, I don't like the Hackney term, you know, like work, life, balance, but lifestyle and, you know, the whole point of this show, living a life in full, to be able to see, you know, how it is, you get to do the kinds of things you want to do and for you to be able to follow the passion of writing and obviously to have the flexibility to write about what inspires you rather than to be beholden to some editor and saying, Chris, you got to write this article by next Thursday and it's got to be 10,000 words and whatever. As I mentioned, I had William Green on the show and he in his book Richer, Wiser, Happier, interviewed a, an investor, a very successful investor who lived to be 109. And kind of the thing that made me think about him with reading your book was that he said, my financial independence has led me to have the opportunity to work, to be 109. And I thought, yeah, because having a job and work are two different kinds of things. I mean, I enjoy working, you know, I'm able bodied and I'm, you know, still got some of my brain power with me and I feel like I still, there's hopefully a variety of things I can still offer to nonprofits, profits and startups and people that are the audience of this podcast, the opportunity to get to talk with interesting people like you as guests on the show. And it doesn't, you know, per se, it's not a job because I'm not getting paid for it. But you could call it work, just like how a writer works at their craft or a carpenter or a painter or something. But it's nice to have the freedom to choose the projects I want, the gifts I want, the writing I want, the startups I want. And it sort of sounds like that's, that's kind of where you're at as well too. Plus the balance of adventure travel and being a dad.

Yeah, and I love that sentiment. And it's so I still, on my blog it's called can I Retire Yet? And so on the header we put like retired at 41 because it kind of draws people in because people are drawn to stories.

Right.

But you, occasionally you'll get people to say, well, you're not really Retired, you're a stay at home dad or you're a writer, you just switch careers. And technically I don't disagree with the people that criticize that. But what I would push back on is say is like, what do you, like, why is retirement the goal? Like, just because, like, that's what everybody does. And so, like, I know for my wife and I, we each ski 50 plus days a year. Like, we just got back, we did the whole month of June and just took a trip, we rented a van and drove the way across the country and wow, spent nine days each way and then spent two weeks with our family back in Pennsylvania. We have the freedom to do the things we want to do. But I think people glamorize retirement as this time when you're going to quit work and then you can be happy. And I think they underestimate the valuable things that work provides from the obvious things like a paycheck, which again, if you're a natural saver, feels really good. And healthcare, which healthcare for an early retiree is probably the biggest challenge. We're still able to get healthcare through my wife as of today, and that may be changing soon. But that's been our plan that got us through at least the first couple of years to just purpose. Like, I was a physical therapist and yeah, I mean, I got really frustrated with the bureaucracy of the American health care system and all the paperwork and all that went with it. But at the end of the day, every day, I was helping people to achieve their goals, to live better. And so when I stepped away from that, there was definitely a void that I had to find a way to fill. And so all these things I think people really need to think about, like, why do I want to retire? And like, can I retire yet? It's beyond just, do I have enough money to retire? But like, do I have a way to fill all these other things that work provides? And for some things, I mean, retirement may not be the answer. And I think a traditional retirement is probably never in the cards for me. I'll probably always be doing something.

Hear, hear. Yeah, it's sort of like, it's, if you hate what you do, you know, then I kind of get it. You know, it seems like such a, an almost an archaic kind of thing, you know, the 50s and 60s, you know, that kind of stereotype of the salaryman, so to speak, and that, you know, the, if you had a choice, you wouldn't be doing what you're doing, but the only reason you're doing it is because you know, you need to have a roof over your head or take care of your family, that sort of thing. So I want to talk just a couple other little things about you, then I want to talk about your book that I want to talk about some things in general. But did you have a calculus in choosing Utah? Is it because of being a ski bum or, you know, what. Why there is cost of living good or what factored into the calculus of Utah?

Yeah. So, I mean, we definitely are. We love the outdoors in general, but in specifically, we are. We love skiing. That's probably our favorite thing. And so ski towns are notoriously expensive.

Yeah.

As we started to look at, like, the places that had really good skiing, we were able, really able to kind of quickly narrow it down to, like, three that kind of fit our criteria. And one was Ogden, Utah, which is where we've ended up. One was in Winter Park, Colorado, which is where Winter Park Ski Resort is. And then one is in Driggs, Idaho, which is the home. It's on the back side of the Tetons, and it's the home of Grand Tarhee Ski Resort. And the other two, like, when we went and started visiting, they were just really small. So for my wife and I, who love the outdoors, it would kind of been ideal. But, like, having a young daughter, we didn't want to pigeonhole her. And also, like, we are close with our families, and my wife still works and she has to occasionally travel. So Ogden, very close to Salt Lake City. We're 40 minutes from a major airport, where the other ones were very much more challenging to get to travel. So that was really our two final criteria.

That's brilliant.

Just the diversity here and the access to travel.

That's good. So when you do your second edition of the book, those would be really good, you know, checklist kinds of things. I think that's brilliant because I think people, you know, sometimes maybe just are too straightforward of, like, just. Just like one variable. But to balance that, you know, to think about, you know, it's. It's. It's. It's our kids and it's access to, you know, the airport. And, you know, it could change, obviously, as your daughter grows up and life changes or what have you, but that's. That's good. So. Well, I. I have one more question about this, then we'll go into the book. But did you guys. Do you own or rent? I mean, I've read a lot of things that talks about people, like, early, like in their post, if they've gone to college, to rent because they may be more likely to have job opportunities and they don't want to be saddled with a mortgage or saddle having to stay in one spot and just look for jobs in that one spot. But what did you choose and what advice do you have for people at whatever point in their life where they're looking to have financial independence? Is it better to own rent house, condo, dirtbag van? What do you recommend?

Yeah, so on, on our blog, that's a topic that we've covered in tremendous detail. Looking at like the rent versus buy analysis, looking at like how does homeownership fit into your overall financial plan and retirement plan? We look at all that stuff in detail. But honestly, at the end of the day for me it was really, it's very much a personal decision. So I mean I was aware of the math. But we kind of looked at where do we really want to live and we kind of broke it down to three areas. Like number one, what do we want to do every day? Like where do we want to spend our time? And so we're, we're 20 minutes from snow basin and 20 minutes from powder Mountain ski resort. So world class skiing we can walk to, hiking, biking, climbing from our back door. So we have all that stuff right here. So we had that. The second thing we looked at is like, who are you going to spend your time with? And kind of, I've alluded to that a little bit. But like this is a very family friendly area and it's a larger population where you have some diverse, diverse groups and you know, beyond the outdoors, like it had it kind of checked all the boxes. And we could also travel to have people visit us and we could visit people. And then the third thing is, and I think from a personal finance standpoint, I think a lot of people start with the money. But that was kind of our third consideration. But it definitely was a consideration of what can we afford. Because we could live in Park City where it's an hour south of here and like the median home price is million dollars and where we could live in Ogden where we live and the median home price was $250,000. And both of those, I'm sure have gone up a lot in the last couple years since we bought our house. But you get the idea that, you know, you get a lot more lifestyle when you're, when you're only committing a quarter of that money to housing versus, you know, buying a million dollar home just to kind of as the, as the price of entry.

Sure. Well, Chris, I'M going to give you a little bit of free career advice. I think you should be the mayor of Ogden because it's, you really, really sold me on the area there just in, in your description with all those kinds of things. So there, there you go.

You know, I, I, I had another blogger like 2 weeks ago reach out to me and I was giving him all this information and then I have, he's actually a reader of my blog. He was a physical therapist connected to my story that way. And he's stopping this Saturday. We're going to grab dinner. So I feel like I might be, I might be the one responsible for driving housing, I think.

So don't come to Ogden single handedly. You know, we're full. Ogden's full.

Yeah, we're all stocked up.

All right, well, good. Well, let me, let's shift into your book now. I want to start off with some descriptions. It's been described as being a distillation of the best of the award winning Choose Phi podcast and pulls from the collective knowledge of those who have decided to build a lifestyle around their passions instead of allowing their finances to dictate their Future. Scott Trench, CEO of BiggerPockets and author of Set for Life, said, this book is outstanding. A proven and effective financial philosophy coupled with specific actionable advice addressing the biggest challenges to financial independence. And it should be on everyone's readers list. And again, Chris, here, here. Congratulations on the book. It was such an enjoyable read. And I think we said this maybe off mic, but you know, I liked how you kind of right off the bat say, you know, this is not a, you know, follow my magical five step approach to nirvana, but instead, you know, here are the principles and you've kind of lived those, you've kind of gone through those, you've learned through them by experience. And then people can kind of apply that as they fit to their age and circumstance and where they are in their life. And I loved how you said it's like a choose your own adventure format. So that's great. But you know, I have a lot of authors that are on the show and I just love to dig into like, you know, how did you set structure your book and how did you decide to do that, etc. So can you say a little bit more about your book, the genesis of it and how you decided to go away from a five step approach or X step approach to more choose your own adventure.

Yeah, so I'm a big fan of Tim Ferriss. He has the Tim Ferriss podcast and I read his book, it's called Tools of Titans. And all that book is is he took the interviews. So he if people familiar with Tim Ferriss, he interviews people that are ultra successful from whatever walk of life, as investors, as Hollywood stars, as athletes, as whatever business tycoons. And he'll take them and he'll interview them to kind of dig out into their, what are their routines, what do they credit their success to, what were their challenges. And then he turned this into a book. And I thought, you know, these fire bloggers and this fire movement transformed my life. And so my original idea was I'm just going to do something similar as like my post retirement hobby is to start a podcast, kind of like you're doing, just talk to interesting people and then distill that down and write a book. And then these two guys, Brad Barrett and Jonathan Mendonza, a couple months ahead of me, they started this podcast called Choose Fi. And they were doing exactly what I wanted to do, talking to exactly the people I wanted to talk to. And honestly at first I was kind of like, I hope they fail because this is my idea. But I started listening myself and I couldn't help but like what they were doing, like the questions they were asking, like the people they were talking to. And also I noticed they were starting to have a little bit of success. And I reached out to them very early, probably four or five months into their podcast and they said, you know, this was the idea I had and I wanted to turn into a book. And I kind of threw out that Tim Ferriss thing and I said, you know, like, would you have any interest in partnering? And they actually, they kind of said, you know, like we kind of realized this is kind of special. But like as you're doing a podcast, these stories and these lessons kind of come in hodgepodge. And they thought that was a great idea to organize it into a book. And so that's kind of how the partnership came about and how we started with the book. And I was going to actually make it look very similar to Tim Ferriss book. So he broke his up into like healthy, wealthy and wise. And so I originally was like spend less, earn more, invest better and kind of distill the lessons like that. And then we kind of wanted to make it more of a narrative though so we could instead of having one chapter be one person's story, we kind of broke it down and looked at what are the common themes. So even so maybe you listen to my story and you think, well this sounds great, but for whatever challenge I have a bigger family. I'm starting with a ton of debt. I don't make as much money. I live in a high cost of living area. So maybe you can't save 50% of your income, but you can take elements of my story, and then you could take elements of somebody else's story who maybe invest differently or something like that. And so we broke it down into principles and kind of made it more of a flowing book versus just. Just a rehash of the. Of the interviews.

It's. Yeah, and it really reads nicely, you know, and you also. It's sort of. I think it's a difficult balance as a writer to sort of give narrative stories, kind of have a. In some sense, like a narrative storyline going throughout. And you also then have, you know, because people also, like, in a book like this, you know, nonfiction, you know, applied to your life kind of book, you have action steps at the end of each chapter, which I found were, you know, was very helpful. And sometimes, you know, I'd look at one and I go, okay, I see this action step. And then I would go back to, like, further think about what that step was. Because sometimes I could look at the action step and think, okay, here's what I would do. Here's what I would do. But if I got stuck on one, I thought, okay, I need to go back and, you know, and review this a little bit, because I guess I really haven't fleshed it out enough for myself. So I just. I love that approach. I think it makes it very engaging to, like, just enjoy reading it, but then it makes it very much hold you accountable as a reader, you know, if you're serious about, you know, looking at financial independence to see what these kinds of things look like. So. And gosh, also, because this may be me as a. In my scientific writing and stuff with journals, but the references to the blogs and podcasts is just a treasure trove. Chris. It's just. It's so wonderful, you know, that. That you cite these kinds of things. And I just found myself, I. I can't read any book without writing in the margins and highlighting stuff and tabbing the pages and making, you know, notes in the front and the back and then separate pages. And it's the same kind of thing. It's like, oh, you know, here's one. Like, if it was a podcast I was familiar with, it was very confirming about what I just read. And it made perfect sense to me. If it was a podcast I'd never heard of, it's like, okay, I gotta, you know, look these up, add them to my queue. So I think people will get a lot of richness by virtue of reading the book and going through the action steps. But then also by, you know, you kind of leave people with, like, the classic, you know, Seinfeld thing, leave people wanting more, that then you give them satisfaction for that too, that once you finish the book. Here's some podcasts, here's some blogs, here's some websites that can help out. So, again, tip of the hat. Great, great, great job, Chris.

I really appreciate that. And that was absolutely intentional. We, you know, like, I think a lot of particularly personal finance people, you know, they'll do something amazing and tip of the hat to them, but then they think everybody should do what they did. And again, we recognized very early, like, I didn't want this to be my story or Brad or Jonathan's story or even any of the gurus of the fire movement. I didn't want it to be about any one person's ideas, but we wanted to kind of really take the best of what everybody was saying and so people could kind of pick and choose what works for them. And my wife, I'm sure I'll listen to this with her because it was her idea to add the action steps.

And so kudos to her. So.

And even beyond my co authors. And we had an amazing editor who kind of one of the concepts in the book that's chapter one, is kind of like creating these stages of financial independence and it not being all about retirement, but kind of allowing this power to build for you. That was probably somewhere in the middle of chapter 15. And she's like, no, no, no. This is what makes this different than what everybody else is saying. So, again, tip of the hat to her that she's like, you know, we have to cut part of this chapter out, and this needs to be chapter one, and you get to kick off with that. So it was absolutely a collaborative thing. And to kind of bring it all together and creating a book is. It was quite a project. It was the better part of two years, but I was very happy with

how it turned out. Yeah, well, it certainly shows. It's a great piece of work. So let's go into even now, more of a deeper dive. That's kind of the structure, but some of the content, in no particular order, you had a very interesting, and I would say probably to some people, controversial chapter about college. So is it like. And you covered a variety of things, but share with folks that haven't had a chance yet to pick up your book, like skip it. Or how do you handle debt if you've not skipped it, but you've got what your wife was facing and you guys with her student loans. What does someone that has financial independence think about if they have kids? Do they think about directing money to a 529? Or just maybe wax philosophic about what your opinions and thoughts about college are?

Yes, this is a great example of how, like, it's not anybody's one story. So I had two co authors and one Brad and myself. We kind of took a very traditional path where college paid off well for us. He was an accountant, I was a physical therapist. But we were able to get through school with, you know, not a lot of debt. So we had above average incomes and our degrees paid off really well, and it kind of set us on this path. Whereas our third author and the co host of the podcast, Jonathan, he was a pharmacist. And the number that sticks in my head is something like 120 some thousand dollars in debt. He ended up to become a pharmacist until he got his degree and took a kind of circuitous route through school. He was closing it on 30 and he's starting $130,000 in the hole. So he's kind of very dogmatic against college. And so we kind of took like, if you're going to go, and kind of how I structured this when I wrote the book. I just wrote this big flow sheet, like, so if you're thinking about starting college, what are the considerations? So I think if you're preparing or if you're a parent helping your child prepare, I think the first question is just, does college even make sense? And that's the first kind of branch in that tree. And for some people, it absolutely makes sense. Like, if you want to be a surgeon, I would not go watch YouTube videos and start trying to operate on somebody, right? So you need to figure out a way to get your education. Whereas, you know, if you want to become an author, maybe it makes sense. But maybe you start writing a blog and developing your skills and developing a network. And even if you're going to go to school, that's probably a good advice. On top of it, like, if you really love writing, you should be doing that. So that's the first step. And then for the people that are going to go to college, you know, how do you get the best value? How do you have the best experience that prepares you to get into the workforce and you're not starting buried in 100 or $200,000 in debt, but you can actually use that income now to provide the lifestyle that you want it to, versus spending a decade or two decades just paying off school loans, which so many people do. And then for other people, if you're already down that path and you have the school loans, what makes sense to get out of them? Do you look for student loan forgiveness? Do you just look to just crush the debt as quickly as possible? And so we kind of go down those different paths and take different people who are much more experts than myself on these things and shared their ideas. And so there's a variety of paths and we don't get dogmatic about any one of them, but instead, again, it's that kind of choose your own adventure and what makes sense for you. And then how do you best put together the pieces based on what other people have done and best practices out there to have the best experience.

That's great. You also have a chapter and section on networks. Can you talk about why you feel they're valuable? How does someone go about building a good network?

Yeah, so, I mean, I think the key thing, and we kind of cited in there, and this was kind of interesting in my research for the book, but we talk about, like, the golden rule of, you know, like, do unto others as you would have them do unto you.

And.

And I grew up within a Christian household, but as I was reading, that's not a Christian concept per se. That's pretty much every religion and philosophy. Yeah. Has. Has some version of that. And, And I think, like, just again, kind of people relate to stories. So just from my own story, reaching out to Brad and Jonathan, I mean, I didn't reach out to them and say, you know, you guys ought to just let me write your book. And because you owe it to me or something. It was like I looked at them and said, you know, you guys have this thing. And again, I did. I was kind of wishing that I wanted to do what they were doing and start the podcast. But when they beat me to the punch, I thought, how can I add value to them? Like, how can I make their life better? So I approached them in that way and, you know, how can I. We can produce a product based on these interviews, which are really powerful, but they're kind of coming in haphazard, and how can we create something that's really going to help other people? And how can I help you do that? And when you. When you approach life like that and you look at how can I add value to other People, you're not always going to get a yes, but you'd be surprised. You're going to start getting yeses where you think they might likely be nos. And so I think just simple things like that, just looking for how you can help and serve other people. And you shouldn't do it with the idea that somebody's going to owe you. But I think if you do that enough, you will end up with this network of people that just inevitably want to help you out because you've helped so many other people.

Yeah, that's good. I think it's just, you know, it's good karma too. You know, it's just a good, good reason for being, you know, makes you a good father with your daughter, et cetera. I had, when Guy Speer was on, one of the things that he talked about was like, he would just like do the proverbial, which my mother would love, handwritten thank you note, you know, and it was just sort of this distinctive kind of thing that would keep, you know, it was kind of unique because, you know, people, sometimes people never thank anybody for something or they just, you know, shoot off kind of a quick little, you know, text or email or something. It's just like that little bit of an extra step and that little bit of an extra effort to say, you know, you know, the showing, how can I add value? And you know, being involved with you, I appreciate, you know, it's just, you know, again, just something that seems to be so forgotten but seems so easy and makes sense when you kind of shine the light on it.

I absolutely love that I mentioned we just got back from our cross country road trip and two people just kind of talk about the impact you can have on people. But my parents, neighbor, she's this not older but like 60s and my daughter and my niece, they were at the house hanging out and this woman loves to paint and they told her that they were doing this art camp. So she came over and just. They painted rocks and she's a pretty amazing artist. And it was just my daughter and my niece, they loved it. And then when we were traveling, we were going through this little town. We just needed a stop. We were in, I think it's Lemmon, South Dakota where we were and we found this, this park that had all these, this petrified wood and they had a museum and a gift shop. And we got there right as they were closing and you could tell that people wanted to go, but they, they said, oh, if you want to bring your daughter in. And we ended up talking to them for probably 45 minutes to an hour. And they're telling us all about the town and the history. And so we snapped a picture with them. And so. So both my parents, neighbor, and this, this older couple that ran the gift shop in the museum at this thing, we sent them like a picture of and then just a thank you note, like a handwritten thank you note. And we had our daughter write it and sign it.

Nice.

Yeah, I think they're just. Yeah, there's. I mean, and that's just kind of the thing. Again, I would absolutely expect nothing in return. I mean, probably the people in South Dakota especially will never see them again. But I think if you just do that enough times that you never know, things do come back around.

Yeah. And it just.

Why we did it. But yeah, that's a practice we absolutely have also.

I love that. So I think you've kind of. We've talked about this in generality, but I'm going to put a label onto it because it's something you use in the book called Progressive Freedom. Can you say a little bit more about that?

Yeah. So, I mean, I think we talked a little bit already about, like, people think, you know, things will be better when, like, when I hit financial independence, things will be better. When I retire and I don't have to go to work, things will be better. And I think they miss out on a whole lot of life. And again, that was kind of probably the blessing that my wife and I had. Like, I think as people learn about these fire, financial independence, retire early principles, they just get so fixated on the goal of I can get to financial independence in 10 years, but if I cut out this and this, I can maybe do it in eight years. And at some point there's just diminishing returns. And so I think just enjoying, like, the advantage. Again, like a great example, we talked about how my wife had that job. If we were in that, if we were drowning in debt and we needed a paycheck, that would have been very risky for her to leave her secure, stable job to go with a startup company that would let her work remotely, let her work part time. But because we weren't quite at financial independence, but because we had such a degree of financial independence built up, like, the worst they could do is say no and why not try. And again, like, when you approach things as, you know, I can bring you value in this way, and I know you would like me to work for you, but I need this and this again, you never know what people may say yes, to. And in our case, it's worked out tremendously well.

I love that. So you also talk about being a valueist. Can you tell us what that is?

Yeah. So that's, again, not a concept. I wish I would have come up with that. I wish I was that creative, but. So somebody just called into the podcast and left a message with those guys. And I was going through all the transcripts as I was working on the book, and I think it was something they may have talked about a bit, but it was kind of just brushed over and I was like, this is absolutely amazing. And it ended up playing a prominent role in the book. So evaluous just means, like, I think a lot of people, they get kind of dogmatic, like, I'm a minimalist, so I'm going to get rid of everything in my life, and that's going to bring me happiest, or I'm going to be ultra frugal and not spend any money, or I'm going to be this or that. And what we said is a valueist is just somebody that, you know, you figure out what you truly value and then you spend your money on those things. And so, like, I don't judge people. Like, we talk in the book, like, one of the big things is cars. Like that you can save a lot of money. And that's a pretty consistent pattern that most of the people that we profiled, they don't really care too much about cars. But by all means, if you absolutely love cars, then go buy a car. But then you're gonna have to figure out where you're gonna cut somewhere else. So for, like my wife and I mentioned, we were really into travel, we were really into outdoors. So the idea that I would ever not have a season ski pass somewhere, the idea that I would never not take vacation, like, it was killing me the last year with COVID Those are things I value. And we spend pretty expensive, extravagantly on them. We've been all around the world, we ski all the time, we climb, we do whatever. But then if you saw my car, you would probably think I was poor. We definitely live in not a. I mean, I think we have a nice enough house, but it's definitely not something you would think of somebody that's able to retire. I think if you think of somebody that's wealthy and living in a mansion, it's far from that. So again, the things that we value, we spend our money on and the things we don't, we try to find the best way to meet our needs and not Spend a penny more than

we have to, you know, and I feel like we're similar to that. I've also seen that in the context of Ramit Sethi. When my son graduated high school, for graduation gifts for him and his buddies, I got them the I Will Teach youh To Be Rich books because I felt like that was a good primer to kind of push back against financial illiteracy. You know, like demystifies FICO scores and credit cards and, and bills and blah, blah, blah, blah, blah. But, you know, he's since then also talked about something very similar in the context of, you know, if, if, if there are certain kinds of things that you just love, then if you are, you know, just, just take no prisoners with being very frugal about the stuff that you don't, you know, care about, then you hopefully will then have that, the abundance, the ability to, you know, spend lavishly on the things that, that do matter. I, I totally get that. I think that's a great idea because, you know, there's always these stereotypes like you said, you know, like, well, if, if you're rich, then you must live in a mansion and you must have a Lamborghini and you must, you know, have your jet and all these kinds of things. And, and people, you know, obviously are wealthy enough to be able to do all those kinds of things. But to say, well, you know, I used to, you know, who's is the car driving you or are you driving the car? You know, kind of thing to think about what is valuable to you, Is it travel, is it whatever? And you know, make your life such that you can do the things that you do value. I think that's, that's a great, great lesson learned with this. Does, does, does that segue into the concept then of hedonic adaptation that you talk about in the book?

Yeah, I mean, I think, absolutely. I think a lot of times people just, you know, once you again. So we talked about kind of thinking you're going to get to this number or you're going to get to, to retirement and be happy and there's always that next thing out there and I'm certainly not immune to it. Like we talked about, both you and I share an interest in climbing mountains and getting into high altitude mountaineering. And, and that's certainly the case, like as you're a climber and like, okay, I did this, but like, what's then the thing that could be what's a higher elevation? What's a more technical mountain? Or where's somewhere that's unique that, you know, that's harder to get to, and it's gonna give me a different experience. And. And there's always that next thing. And it's a fine line to balance that, I think. I think when you don't have any ambition, that's not a healthy thing. But also when you always need more, when you can never just stop and smell the roses, that's a problem. And so that's. I think I don't have an easy answer there. Like, I love that concept of being a valueist. I think there's a kind of a clear definition and a clear way to explain that. But kind of finding that balance between ambition and contentment is probably something I'll wrestle with for the rest of my life. And I think most people do.

Yeah, there's. I'm blocking on the guy's name. It just. I could kick myself. But the fellow that wrote catch 22, there's a little anecdote of him with Kurt Vonnegut. And they're at some lavish party by some, you know, rich, rich person who had invited them both. And Kurt leans over to the author, whose name I'm spacing on, and says, you know, what do you think about this? You know, you're. Your book's popular, et cetera, et cetera. But, you know, this guy, look at this. You know, he's got everything he wants and opulence, et cetera. And he says back to Kurt, well, I have one thing that he doesn't. And Kurt Vonnegut looks at him and says, what's that? And he goes, enough. And I thought, yeah, I love that. That if you're, you know, the proverbial gratitude kind of thing, not to be cliche about it, but, you know, to be happy with what you have and to have, you know, what you're happy with, I think gets back to this whole valueless kind of perspective and to not be on that horrible treadmill of the next faster car, the next bigger thing, or what have you. I think it gets back to an issue of feeling like you have enough and that there's a level of satisfaction with where you are, with the quality of your life. So good points from maybe a little bit more of a mechanical aspect. You cover the different kinds of paths. You refer to them as an active path and a simple path and a hybrid path and combinations thereof. Can you unpack that a little bit? For folks that aren't familiar with those approaches of different paths?

Yeah, so we talk about that in the Invest Better section of the book. And so I think a lot of people, when they think of investments, they think of stocks, bonds, mutual funds, maybe insurance products, things of that nature. And that's kind of the limit of how they think about investments. If you're somebody with a high savings rate, like my wife and I mentioned, we were living off one salary and saving the other completely, that works. And you can get to financial independence very quickly within a decade or two at most, just as a function of your savings rate. But the problem is not everybody can do that. And so you need to kind of look at for those people, how can you get higher rates of return than you can realistically expect on simple stock and bond investments? I think a lot of people go down this route of like, well, maybe I'll invest in cryptocurrency because I can 10x my money in a year. But I mean, those things come with a lot of risk. So that's not what we're writing about in the book when we talk about these other paths. So what we're talking about. So the simple path is just a high savings rate. And then you combine that with proven investment strategies of just simple passive, low cost, low maintenance index funds for stocks and bonds and some combination of that. But then for people who that won't work, we talk about the active path. And that's really like when you're investing in your own business. So maybe if you're a plumber and you can make $50,000 a year as a plumber, but that's not getting it done as a single wage earner. But can you turn that into a plumbing business and scale it and start hiring other people and doing something like that or, or any iteration you want to kind of other example you want to use. So that would be the active path. And then the hybrid path is what I call, is the name I gave to like real estate investing. And the reason we call it that is stocks and bonds, they have reliable income and dividends and interest. And real estate has some reliable income in the form of rent and appreciation in prices. So it's similar to stocks and bonds in that way, but it's also very much a business. And you can add value again if you have some kind of skills. Maybe you're a plumber, maybe you're a carpenter. Can you improve a property? Do you have time on your hands? Can you go out and find deals and invest the time that other people don't? Do you have some money where you can throw cash at a property and get a better price than somebody that needs Financing. So there's a lot of different ways you can apply leverage through your sweat equity and increase your income. So kind of finding the path of investment that A, is going to lead you to your goals and B, actually fits your interests and your abilities. And that's kind of, I think, the way we approach that, those three paths and how it's different than most people talk about investments.

Yeah, that's good. I liked that. So we talked a little bit earlier on, like about, you know, your circumstance and maybe we can talk about it in the context, not so much you guys, because, you know, you're a bit of a hybrid with things, but I know that you have knowledge and expertise in other ways to skin the cat. So we talked about like, if you had that hypothetical million dollars and you're withdrawing 40% a year, so you've got $40,000 to cover your expenses for that, that year. When someone does that, what's the approach like? So, like it's pulled out. Is it pulled out? Equally across. And let's just for simplicity's sake, let's say it's all an etf. So does someone, let's say they've got a, you know, you know, a value ETF and a growth ETF and an S&P ETF and a bond ETF. Let's just say for simplicity's sake, do they pull out, you know, 4% from each one of those ETFs? Do they look at the one that's had the biggest gain and they, they harvest those gains, being mindful of, you know, whatever tax consequence there may be to that, do they then rebalance? So, you know, it's again, I like the simplicity of thinking about, okay, $1 million times 4%, $40,000. Live off that, you know, but, but then what happens with, you know, the balance of that money and what are some of the ways that, that, you know, people approach dealing with the rebalancing or, or how they've pulled out those funds.

Yeah. So I hope I don't come across as kind of like eluding the question or not giving you a straight answer. But so how we write about it in the book and how I like to think about it is. So it starts with what's called the 4% rule, which is kind of a name that people have given to that concept that you can take 4%, adjust it for inflation forever, and you won't run out of money in all but the absolute worst case scenarios. I would call it the 4% rule of thumb. It's not a Rule, there is no one way to take it or one way to do it. And there's no guarantee that if you do that, you're not going to run out of money. Like we're at a pretty unprecedented time when it comes to a combination of extremely low interest rates. If you look at like the real interest rate, like by not looking at what a nominal bond will yield, but what like TIPS a Treasury inflation protected security will produce, it's actually negative. So if you put money in, you would expect to get a negative rate of return, or if you buy a regular bond, you expect that it's not going to do as well, not going to return as much as inflation. So you're actually basically paying money to losing money. Bonds typically would produce more income than they do now. And also when bond rates drop, then your value of your existing bonds goes up. And with rates being pretty much at the floor, there's not much room, if any, for them to go up in value and they can only go down. So it is kind of a unique time with interest rates being so low and then simultaneously, because rates have been so low for so long, asset prices have been kind of blown up. So stocks are relatively expensive. So you would expect them not to do as well as they have in the past. There's no guarantee there again, but it's a reasonable expectation. So maybe the 4% rule is really the 3% rule, or some people are even saying less than that with a long retirement timeframe. So the 4% rule is basically not perfect by any means. But there is two reasons I really love it. And the first reason it just, it gives you a true north. So we talked about like that, that example you just gave with the story where somebody has enough. And so it forces you to focus on what is enough. Like what do you actually spend and what do you want to spend? Do you see that going up or down and then some multiple of that is what you need to be financially independent. So it kind of, it forces you to think about enough and then it gives you a true north. Like a lot of times when people say, well, how much do you need to retire? And a lot of times it's like, well, you should probably have 80% of what you made when you were working. Well, that's totally ridiculous. If you think about like if you have two twins and one makes a school teacher making $40,000 a year and the other becomes an orthopedic surgeon making $400,000 a year. But they were raised the same, they have the same values, the Same interest, they're identical twins. Why would one need to 10 times more to retire? It's absurd. But it's kind of not absurd because most people do that. They spend up to their income. And so kind of having this 4% rule of thumb, it gives you a great starting point, it gives you a great true north. It gives you a great way to kind of think about enough. But it's not as simple as kind of the question that you're asking of like you just take out this X amount and there's an absolute right or wrong answer that, that doesn't exist.

Gotcha. So, like you mentioned also the aspect of inflation. So, you know, we're. Everything I read now in the papers and online is, you know, talking about, you know, food and, you know, food is more expensive now. And there's a variety of other things by virtue of macro and microeconomic factors that seem to be kind of putting this cloud of inflation scaring everybody. So in inflationary times, does someone then say, I scale back from my, do I, do I withdraw, try and live on the $30,000 a year because I'm taking 3% out? Or how do people that are financially independent keep an eye out for inflation? And do they tweak up, do they tweak down? Or what are some ways to compensate for that?

Yes, I think you have the traditional kind of really conservative finance people who will say 4% is definitely too high and you need to go down. There's other people that will point out that the 4% rule is based on what is the minimum you could take out in the worst historical scenario. So again, things could always be worse. But 4% would hold up pretty well against basically like the Great Depression and times like that. It would be a combination of really low returns and really high inflation that would cause that to fail. So again, nobody knows the right answer. I can tell you. Like, for my wife and I think for most people that are, that are able to save enough to get to this point point, we tend to be very conservative. So I think most people have a really low withdrawal rate. And like, for my wife and I, we, I would say, and again, this is kind of one of those things where perception versus reality we talked about, like, we're rock climbers, we were mountaineers, we're skiers. And I also, I retired at 41. So you might think I'm a risk taker, but I would say I'm extremely risk averse. And so a concept. And if you're into climbing at all, you probably have heard of the concept of like redundancy, where if you're climbing something, you have two anchors and each with each of which should independently be able to hold you, but you have two because one could fail. And when there's something like with your life is on the line, you don't want to risk that.

Right, right.

And it's kind of the approach we've taken with our finances. So from day one, we built our lifestyle. We could live on one income with my wife and I, and then over time we've just saved the other one. And so it gave us a lot of, a lot of safety while at the same time having a pretty good lifestyle. And so as we, I mentioned like as we got to retirement, my wife particularly got kind of freaked out. But I can't say it felt good for me, the idea of drawing down. So we kind of looked at what if we worked enough through these part time work and hobby businesses and things like that, that could more or less support us? It should. And then we have a portfolio that on its own should support us. And so most years, like we're taking 0% because we're very young. So we're in our mid-40s and we have potentially 50 year retirement horizon. So yeah, our goal personally is to be less than 2%. And in practice we're probably like 0%. We're not really saving and we're not really spending at this point in time.

Wow. Do you keep like a cash buffer? Like if the market did take a nosedive so that you don't have to cash out of a stock as the, you know, as the bottoms dropping out? If it was 2008, yeah.

So like when we were in our accumulation phase where we were saving one income, we really didn't care about that. We had our career. So I was a physical therapist. My wife's in like analytics and she had a government job. And so the chances of both of us being laid off simultaneously were extremely small. And we wouldn't most likely need our investments. So we really didn't worry about that. We generally never had more than maybe five or ten thousand dollars in cash. Now that we're at this point where things are less certain, we are kind of transitioning. So we keep about a year in cash and we think that's enough for us to feel pretty comfortable. That gives us plenty of times to figure things out where we wouldn't have to sell things low, whether it means cutting back, whether it means making some more income. So a year is a spot where we feel kind of is the sweet spot for us. But again, that's. It's a very. I don't think there's a one size fits all answer there. It's very personal to your risk tolerance and your circumstances.

Gotcha. But at least to keep something under the mattress, you know, so, yeah, we

like to have about a year. That's where we're.

That's good. I think that's a good rule of thumb. So what happens? One of the classic things that bankrupt people is medical debt. I think there's a lot of political looking into this now. And just again, the feeds that I read in the healthcare side of things, talking about hospital costs and end of life costs and these kinds of things. How does someone in the financial world that is financially independent think about or hedge against? What if they have a catastrophic accident or if they have, God forbid, some catastrophic kind of illness for themselves or someone in their family and they're not necessarily well insured or well enough insured. What are ways that people hedge against those kinds of horrible unknowns?

Yeah, so I think that's the biggest challenge, at least from the American context. That's pretty unique challenge, I think, in the United States, but it's a major challenge. And currently, as the law is written, we have the Affordable Care act. And that's like, people may know of it as like, Obamacare is the kind of layman's term for the law, but what it does is it looks at your income and if your income on paper is low enough, then you can qualify for subsidies that can be very generous. And so you can be a million, you can have $10 million. But if you don't have a high spend and so you're not creating much taxable income on your income tax form, then you can get that subsidized. Some people don't like that. Some people love that from their political. That's more of a political opinion. But that's the law as it is. And so that's probably what most people do. And when the time comes where my wife cuts back more, where we don't get insurance to her employer, as we currently do, that would be the approach we take is to try to optimize those tax credits. And again, like, I think there's some people that have a problem with that. And I just kind of, I guess, look at it as, you know, like, it's really no different than maxing out your 401k to defer your taxes or any other thing. It's just, it's the law as it's written and I don't particularly like it. Having worked in healthcare, I don't like the way our system works, but it is what it is. So rather than kind of pontificating on the way it should be, I tend to look at what is the law and how do I work it to my advantage because that's really all you can do.

That's good.

So that's probably the most common approach.

Some tips just for, from my experience too, for the audience is that back in the day my wife and I were like both stitching together our incomes and stuff and we had had two children and, and we would just make deals with our pediatrician and whoever else to say, hey, look, here's our circumstance. You know, we're both in private practice, we're both doing this and that we don't have, you know, we actually had like a catastrophic Blue Cross Blue Shield thing. So if somebody got hit by a bus or had some sort of horrible thing, but it was like a super high deductible, et cetera, and it was still plenty of a premium for a family of four. But we, I also knew because I used to do contract negotiation for managed care for the hospital that I had worked at that, you know, it costs money to bill, you know, this as a physical therapist, you know, you don't just, you know, see somebody and submit a bill and, you know, and it magically gets paid. So we said we will write you a check at the end of every pediatric visit, you know, for, you know, could we get a 10, 15% discount off your usual and customary service? And off the top of my head, I would say probably 80% of the time they were very benevolent with that and said, you know, we, because we were like saying net net is probably going to be the same for you, but we, you know, we don't have the kind of insurance that would, you know, cover what you want. So. So there are other ways that people have good relationships with their health care providers to be able to make it, to not take advantage of the healthcare provider. But to say, you know, hey, if, if net net, it's going to be about the same cost, can we just write you a check and you don't have to bill us. You, we don't have to do an eob, you don't have to go through all the, the rigmarole of that. And that was an approach we used 20 some odd years ago. So I think it is, you know, the creativity of this or taking advantage of in a positive way, not in a manipulative way. But taking advantage of, you know, a person's circumstance and creativity I think can go a long way.

And I think like with financial independence in general, that creativity and again not asking necessarily for something, but how can we make something that mutually beneficial. I love all of the ideas behind that. I guess maybe the one area I would even maybe push back though a little bit is I do think there's just like if you look at bankruptcy statistics and things like that, I think like the one big risk, probably the biggest risk for most people is a major health thing. And it's really not, you know, unfortunately I had a friend who retired at the same time I did and he developed a very aggressive brain tumor and died within a year. And as tragic as that is, his wife and kids are fine. I think really the, I mean financially fine. I don't want to sound insensitive when I'm saying this. I'm going to kind of choose my words carefully. But from a financial standpoint, I think if you got a cancer or a, you know, like I talk about, I do adventure sports, if you developed a spinal cord injury or something there you have those type of immense overwhelming healthcare costs, 20, $30,000 a year and you're doing that for 20 or 30 years. I mean you can see where that would quickly destroy you and that's not an unrealistic expectations. So you definitely have to have good insurance that is going to protect you from those worst case scenarios. These can add up really quickly. It's kind of a unique challenge to the US American listener versus people in other countries are scratching their head why we can't come up with something better. But it's the system that we have.

Yeah, I've had people that are kind of digital nomads and they talk about, you know, they're living in Costa Rica and and basically they have insurance for like being an expat but they don't even use it because it's so going into, you know, get a procedure is. Is pretty inexpensive. So. Yeah, I know what you're saying. You've been very generous with your time. Do you have time for a few more final up?

Yeah, I don't have many heart. Stop.

Great. Okay, good. So I know that you also from the book and from your writings talked about, you know like you had some not so great experiences with investing in the first part and first point in part of your career. So today if it's not too intrusive but do you use or do you have opinions about like robo investment tools or how do you keep your accounts? Or you know, what, what is your, like, how do you, do you just do it independently like a TD Ameritrade account or how do you do for the mechanics of managing your funds?

Yeah, I mean, I personally, I am strictly a do it yourselfer. I use Vanguard. I invest really strictly in very low cost passive index funds. My portfolio is extremely boring.

That's good. That's good.

I say that proudly. I think that's what most people should do and they get sucked into the idea that it has to be complicated. And that's probably my one complaint. Like, I think robo advisors have taken what traditional advisors used to do with building a portfolio and they do it as well and they do it much cheaper. So from that standpoint, I'm a fan of robo advisors. Where I have a problem with robo advisors is I think where an advisor can add value is on the behavioral aspects, which I think a lot of people underestimate. Like, what are you going to do if you're, if this fund you have drops 20% or 30% in a couple of weeks as it did last year during the coronavirus, are you going to be okay with that and be calm and sit and hold it and think that it's going to bounce back because historically it always has, or are you going to panic and your robo advisor is not going to stop you from selling or doing anything? And so that's where I think an advisor can be of value. And the idea of putting together a portfolio, yes, a robo advisor does a fine job with that. But if you read three or four books and spend maybe one month just dedicating yourself to learning a really simple strategy, you can do that on your own and save yourself a quarter or half a percent, which a robo advisor would charge you. And over time, it's amazing what those seemingly small percentages will add up to.

Right. It's sort of like the negative cousin of, or the doppelganger of compound interest, you know, sort of like.

Yes, absolutely.

Yeah, we had an experience, experience with kind of, I, I won't mention the name of the, the entity, but we had been invested with an entity for a while and I got to a point where I was saying, you know, well, I, I just want to see how the performance of, you know, what you're picking is versus, you know, a standard benchmark. You know, pick a benchmark, you want to pick the S and P, you want to pick the Dow, you want to pick the nasdaq, you know, What, What? How do I know, you know, that. That your performance is worth whatever fees it is that we're paying. And I could not, I tell you, Chris, I mean, this was like, it was like a tug of war for like over a couple of years. And finally, you know, my wife and I just said, you know, okay, well, this, we need to go shopping for, you know, a different kind of solution to this. And, you know, I appreciate what you're saying. You know, Vanguard, you know, we're both, my wife and I are both Bogleheads. So. So there's these kinds of things that aren't necessarily rocket science to, to go and discover. I think it is hard for some people sometimes. I think, again, your book helps demystify this kind of judging what's baloney and what's snake oil versus what's legitimate kinds of things. And obviously Vanguard's kind of a great way to be able to look at that.

Before we move on, if I can just share a really quick story, please, because I think if your listeners have a tendency to kind of have a healthcare background, they might really relate to this. But. So when we started investing, so my parents were both high school educated, didn't have a big income, and they, but they were just extremely good with stretching a dollar and saving. And so they were my brother and I through school, and I knew that. And so when we got out and I knew they were investing. And so when I got out of school and we started having some money to invest, I just went to them and I said, you know, you guys seem like you're doing well. Do you have any advice? And they said, well, we don't know what we're doing. We just use this guy. And so that was literally, that was the extent of my due diligence. Whatever he told us, we did. And for a decade, that's what we did. And then I started finding these fire blogs and I started learning about passive index funds and what that meant and tax efficient investment and what that meant and the impact of fees and what that meant. And I started looking at what we had and I was like, I got to get rid of them. So we fired our advisor. But like, I was still kind of trapped in that idea that investing is hard. So my initial thought was, you know, and in retrospect, I learned that we didn't particularly get ripped off. We just got very standard advice that you get when you go and pay for advice. And. But my thought was, we just have to find a better advisor. So I had a, my, I called my Work wife, my physical therapist I work with. And I, I went to him and I said, you know, do you. You seem like you're kind of careful with your money. Do you use an advisor or do you invest? And he said, yeah. I said, well, how did you find them? What questions did you ask? What did you do? And he said, Dr. So and so and Dr. So and so. They both use them. And I know they have a lot more money than me, so if she's good enough for them, then she has to be good enough for me. And like, for whatever reason when he said that, like, immediately the light bulb just went off and it's like, well, they went to school to become surgeons and they make a lot more, so they should have more than you. And like, what, in your training as an orthopedic surgeon, like that, when you're learning to, you know, fix a rotator cup or replace a hip or whatever would have anything to do with what your asset allocation. It made absolutely. Like, his reasoning made no sense. And I don't say this to make fun of him. I say this because I had the exact same process.

And for whatever reason, I get it,

hearing it from somebody else's mouth, it was just like, this is so stupid. But that was the exact approach I took. I go, I went to my parents, I said, who do you use? I never asked a question. I did absolutely everything. And we just got horrible advice and very expensive advice. And because, yeah, people don't know what to ask. So you really have to kind of be very careful about that and think about, you know, how you're going to find an advisor if you're going to use one.

Yeah, it's sort of like a necessary but not sufficient condition. You know, it's sort of like the

blind leading the blind.

Yeah.

Fellow PT don't want to rip me off. Yeah, yeah.

Winnows things down, but you still got to do your due diligence. Diligence, yes, absolutely. So how does. This has just been a very personal question of mine, which I think most of the rest of these have been as well, too, so I appreciate you. Guy Spier refers to this as learning in public. So it's very transparent of what Chris Stout is curious about, but, like, in the context of, like, we're talking about healthcare. So I keep thinking about, you're much further away from it than I am, but thinking about healthcare in the context of Medicare and, and the ACA and all that. But what happens if someone's been financially independent since age 41 or 35 or 50 or whatever. How does that. I mean it might have in some sense and maybe it doesn't matter a deleterious impact on subsequent Social Security. Like if you're not, like if this is dumb question number 506 in today's conversation. But, but like if I make money off my investments and I'm retired at 41 and I made, I'm making this up $50,000 on my investments, then, and I pay my taxes on that and my Social Security, et cetera, et cetera, if I don't have anything else going on, if I have no side gigs or side hustles, does that then I guess I'm paying my taxes and I'm paying into Social Security security on that $50,000 and it would just look like income as if I had a job that had, that paid $50,000. So then when it comes retirement time, whenever I choose to do Social Security retirement, that those dollars then show up that way. Is that how it works? And again, my huge apologies as I'm asking this question. I know it's so dumb, but I'm

just, you know, that's actually a question. So I kind of got to the point and I retired totally ignorant Social Security. So this is something I really didn't understand myself until probably about a year ago. And I can, I can share the link and if you want to share it with your listeners, please. So kind of you keep hearing that Social Security is underfunded. It's underfunded, it's not going to be there. And so I kind of did my plan that we should be okay without Social Security. And in the back of my head I thought, well, we'll probably get something and whatever is there would just be a bonus, it would just be gravy. And so I never paid attention to it. And then I started helping my parents. So I mentioned how I fired their advisor, they eventually fired their advisor. And I do, I help them with their investments and doing that I saw the impact of their Social Security and you know, how much it contributed to their well being. And I thought, you know, this is something I shouldn't be ignoring. So I did a deep dive on it. And so how Social Security works is you pay a percentage of your income and if you work for somebody, you pay half of that and then your employer pays half. And I believe it's off the top of my head, it's like 6.2%.

Okay.

And so if you're self employed, you're paying 12.4. If I'm from remembering and that might not be exactly correct, but directionally it is. And so you're paying that in and then over your 35 highest earning years, they take that and they adjust how much you paid in and they adjust it for inflation. And that is what determines your benefit whenever you hit retirement, retirement age. And so as somebody that retired at 41 and I worked through school, but some of those years were Really, I made eight, $10,000. I had really low years and then I had about 15 years of a professional salary. And then by retiring early, I'm going to have a decade or so of zeros going into my average. So in addition to, we talked about like by continuing to do some part time work in early retirement in addition to not having to spend my portfolio. So it's helping me there. It's also beefing up my average. So even if I make $10,000 doing this writing or whatever, a very small amount, it's better than zero when you're factoring that in over 10 years.

Interesting.

So it'll boost my Social Security benefit by the time I get to that age. So yeah, I'll definitely share that link and it's an answer to something that I spent a week researching and diving into the details, but it's worth understanding how it works.

Good. Thank you. That's, that's awesome. Good. Well, I hope it will be helpful for as many people as it will be for me. So I personally appreciate that. So maybe my last question, one of the things that your book ends with is talking about like using if you're financially independent, when someone hits that point or maybe even prior to it on their way, using their one's freedom to make the world a better place. Can you maybe share because of the nature of, you know, my background with, in the nonprofit world and with, you know, what we focus on and living your life in full on this podcast, some examples of what some financially independent folks are doing in that respect.

Yeah, I mean people do a lot of different things. I mean I know in the community a number of people will focus on using like donor advised funds as just giving of their money because you know, as they especially people that continue to work beyond financial independence, they're able to give of their money. For me personally, this is kind of an interesting story, but I kind of, we talked about that idea of magical thinking and I always was, I think fairly generous with giving of my money. But I never really, you know, between working full time and like having the hobbies that I had and then becoming a parent, I just always Felt like I never had time to give of my time. You know, it was kind of that, like, things will be better when I will give more when. And I realized, like, at the end of my first year, I did virtually nothing to give back. So I'm really looking at how can I be more valuable with my time and make a difference. And that's kind of where I'm trying to focus my attention. And part of that is why I write and try to spread this message and try to spread this message of hope and try to spread this message that these things are accessible with other people. So even though I do monetize to some degree, I view this really much more as a way of giving back. And that's what kind of got me into it. And then also just in my community, like I like to. Like I mentioned, I have a love of the outdoors and I have a background as a physical therapist. So one of the things that I've been doing since I moved here is I'm involved with an adaptive ski program. Covid has really kind of put a damper on any kind of social things where you're interacting with people. But we're looking to now that things are hopefully going to start getting back to somewhat normal. Expanding that program out to like a summer and doing adaptations adaptive sports. So I just did a training last week. We're close to Weber State University with the people that run their program doing like adaptive climbing and we do some adaptive biking. So I'm looking to get more involved with those things. And my experience and my knowledge as a physical therapist, I think adds value beyond what, you know, the everyday volunteer could do. And so just things like that, where I'm kind of combining my passions to help people is something that I'm personally trying to do more of.

That's a great idea. That's really a great point. I mean, the. The we used to call it at our attention church, we used to go to your time, talent and treasure, you know, so that's really a good point of then being able to have that space, but also like you and others doing with whatever skills they might bring to bear to be able to bring that expertise to others that obviously otherwise would not be able to have that exposure. Good for you. Well, Chris, I just. I want to thank you again. You have been so generous with allowing me to just pepper you with such dumb questions. So I personally appreciate this. I've been taking little scratches and notes and things and look forward to kind of going through a transcript of our time together for people that want to learn more about you, to hop on your blog to read about your writing, to get a copy of the book. What are some of the best ways that you'd recommend?

Yeah, I appreciate you asking and giving me a chance to plug things a little bit. And for people that maybe are just never have heard of the idea of financial independence or fire and my story kind of resonated but they don't know where to start, I think the book is the best place. It's called choose fi your blueprint to financial independence and you can get that on Amazon or through my website or anywhere where you find books. And then I typically my blog is called can I Retire Yet? And that's really for a different audience. It's more people that maybe if you have some degree of financial independence and you want to know, do I have enough financially to retire? And also, you know, there's more to the question than that, like what is your purpose going to be after retirement? How are you going to deal with all those things? And so those are the kind of issues I explore on the blog and that's also my home on the Internet. So if anybody wants to reach out and connect and I know you said that you have some tend to have a audience with a disproportionate number of physical therapists and I've had a number of people who related to my story just from that aspect. So yeah, I love connecting with people who are interested in these things and feel free to reach out to me through the blog.

That that again is a continuation of your generosity. I really appreciate it, Chris. It's good to get to know you a little bit better. I very much enjoy your work and it's been a treat to have you on as a guest today. Thank you.

It's been a pleasure talking to you.

Living a life in LifeLull is a production of Stout Media, a subsidiary of Gordian Knot, LLC. Assistant producer Gracie Wong Music Dan O' Brien executive producer and host Dr. Chris Stout to learn more, stop by our website at lifeinfull for show notes and please recommend us to your friends and subscribe on your favorite platform. And as for the obligatory disclaimer, this podcast is for general information uses only and does not constitute the practice of psychology, medicine, nutrition or other professional health care services, including the giving of medical or psychological advice. No doctor patient relationship is formed. Lastly, and perhaps most importantly, I take conflicts of interest seriously. For all of my disclosures as well as show notes, please see livingalifeinfull.org podcast and my LinkedIn profile. Thanks. And until next time.