Jonathan Mendonsa: Past, Present, & Future of Financial Independence

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Welcome to the new retirement podcast. Today we're going to be talking with Jonathan Mendonza, who is a former pharmacist turned podcasting rock star and founder of ChooseFi.com. jonathan lives in Richmond, Virginia, is married, and has two dogs, Zoe and Kiki. I met Jonathan in September at my second FinCon in Orlando, Florida, and I thought it would be interesting to talk with him about the past, present and future of the Fire movement, since he's got a great perspective on this as someone who's personally on the journey to financial independence and someone who's learning a lot from his rapidly growing community at Choose Fi. So with that, Jonathan, welcome to our show. It's great to have you join us. Thanks for making the time, Steve.

Thanks so much for having me. And thank you so much for including my dogs by name on the show. I mean, they are grateful for the mention. And yeah, it's one big fan.

I know. You'll have to start an Instagram for them, right? Get them super famous.

Absolutely.

Yeah. No, I have a dog as well, Lilac, and she's definitely been a great addition to our family. Keeps us all happier, I think, and also exercising a lot more, getting out in the woods every day. So it's been good.

Awesome. Past, Present and Future. Financial Independence or the Fire Movement. I love it. What a great title for an episode. And I think it's one that we can have a lot of fun talking about because, you know, it's not something that started like this year. I mean, this, this, it has a pretty storied history going back probably. I mean, farther than any of us can even really track. Maybe even the 1900s with Henry David Thoreau and Walden. I mean, talking about a simpler way of life, you know.

Totally. Yeah. I was actually. And getting ready for this. I was. I was doing some reading. You know, I'd written a little bit about, you know, the Fire movement before with early retirement extreme and Mr. Money mustache. And then as I was digging around, I was like, oh, wait, look, Vicki, you know, Robin with youh Money, you, Life, which was Pub in 1992. And actually reading up on what she was doing. Apparently she was giving talks back in the mid-80s and made a cassette tape version of her talk to spread the word. In a lot of ways, she says the same stuff that she was definitely a precursor to Mr. Money Mustache with the Simple Living and Intentional living.

Oh, yeah. In 1980, when Vicki, Robin, and Joe started doing their seminars around the country, that was really probably the first time that the word financial Independence was, was actually levied or being used. And then when they, you know, in the 1990s, when they, when she kind of, when she released the book youk Money or your Life, that thing took off. I mean, it was getting picked up on all the, all the major TV networks. She was going on the morning circuit, she was on the Oprah Book Club. I mean, she was telling me that by the time when it hit critical mass, when it kind of peaked in the mid-1990s, they estimated that they had reached. And there's probably a lot of overlap, a lot of duplicates here, but just by, in terms of sheer numbers of the people that were watching the shows that were being talked about this idea over half the country, half the United States.

Wow, that's amazing. Well, it definitely feels like it's coming back again with a vengeance. And I definitely want to get into that a little bit farther ahead. But before we jump in there, I always like to, for our audience, start with people's personal story. I remember talking with you about yours, but I'd love to hear it in your own words. What brought you to pursuing financial independence and where you are today?

This is a really interesting question. It can go a couple different directions, but let's just start by saying that I have for a long, long period of time been a fan of this idea of financial independence. The idea that you can get to the point where working is optional. Not to say that you have to stop working, but if you do work, it's on your terms, it's because you want to. And what was interesting about this is probably in the early 2000s, I was deciding my career course and I was at this point looking into going into pharmacy. And I had actually gotten accepted to school and I knew there was going to be a pretty heavy student loan burden that went right along with this. And about that time, I stumbled onto Dave Ramsey talking about debt is dumb, cash is king. And that was really my gateway to personal finance. And I was introduced to personal finance before financial independence. And what was interesting to me is Dave really motivated me to pay down my debt and kind of move towards this, this debt free standpoint, which is difficult when you have six figures of student loan debt. But along that journey, I realized I could see that I would be able to get to debt free. But I realized it's kind of just the beginning. And so I was wondering, well, what else is out there? And that's when I stumbled into some of these other characters that maybe we'll get a chance to talk about. In the context of the history of the fire movement. But this idea that it doesn't have to be so complicated, you don't need to get a master's degree or a doctorate. It's not something that you need to fork over tens of thousands of dollars or, you know, go to college. Just be good at personal finance. You can learn this with a relatively short amount of time, maybe 20 to 40 hours of just being willing to soak yourself in this type of information. Like, frankly, that amount of time would probably be enough to carry you to a pretty solid financial future. And then if you want to take it to that next level, there's all these different ways to get better and better with your personal finances. And then I just got hooked and people like Mr. Money Mustache turned it into a game, turned it into an optimization strategy. And I realized, man, if, you know, if he can do this on, you know, have this lifestyle of like $30,000 a year, you know, if I wanted to have double that. The math, the math is just the math. He has an article called the Shockingly Simple Math of Early Retirement. And that for me was just a really big deal. The idea that you could simplify how to get to the point where working is optional, it's just a math problem. And build, build a construct, build a frame that allows you to get to that point and allows you to have a lifestyle that you can actually get excited about in the process. And so it was kind of like there's these touch points and we can maybe slow down and touch on a few of them, but there are these influencers that brought together these different concepts that allowed me to forge a roadmap in my own mind to reach financial independence. And I thought frankly that my path was basically just going to look like, all right, I'm a pharmacist, I have a entry level six figure income. I have six figures of student loan debt. I am initially going to save 70, 80% of my income, pay down my debt, do that in about four years, and then I'm going to work for another like 10 years and then I'm going to be it financially independent, and then I'll decide whether or not I'm going to work or not. But along the way, what you realize when you're debt free, like you've automatically already built options into your life and if your job is no longer lighting you up, like, you can go do something else. And in our case, in my case, I actually started a little side hustle just as a project on the side with my With a partner, with my co host, Brad Barrett, we just wanted to talk about this idea of financial independence and find people that had kind of a similar idea on the topic. And, and we started a podcast. I mean, you know, neither of us have a radio background. We just like talking about this and if we could do anything, if we could talk about anything, we'd want, we'd want to talk about this topic. And it found an audience. And this is the beginning of 2017. It found an audience pretty quickly. And using some of the principles that we actually talk about on the show, in a relatively short period of time, it started to actually cover my bills, cover my core living expenses. Wasn't like lighting up the world, not a millionaire, but just, you know, it was actually replacing my core expenses. And keep in mind, because I had already cut my expenses down to the bone to pay off my debt, like, I just, it didn't cost a lot. It didn't cost a lot to make it from one month to the next. And as I kind of got farther down this path and it kind of started to now pass my core expenses, I said, wait a second, I have options. I'm not saddled by six figures of student loan debt anymore. I'm not saddled by an expensive mortgage. I'm not saddled by the trappings of a high flying consumer lifestyle. If I want, I can take this, you know, you could call it a risk, but I was just thinking of as an opportunity. I could, I could take this opportunity and just do this podcast, which is lighting me up full time, and go down this path. And if it doesn't work out, if I burn out, if it just, you know, if it doesn't work, I can just go back. You know, that's my worst case scenario because I don't, I don't have debt anymore. I don't have. There's no real risk involved. It may have been scary, but it wasn't risky.

Right. I think that's really amazing. Kind of hear your story about how the framework and mindset that led you to pursue Fi kind of gave you the flexibility to think about doing something different, which you, the podcast, which you tried, and then that was something you were really passionate about. That passion kind of showed through, obviously, and attracted an audience and has led to other options in your life. So you didn't really set out necessarily to say, hey, I'm going to become financially independent through this podcast. Maybe that will happen, maybe it won't. But the kind of setting yourself up initially to kind of think about Fi and cut your costs slow gave you the optionality to do that. And it seems to be working out pretty well.

There's this duality here that with my co host, my partner, he was actually at financial, he was financially independent. He never needs to work another day in his life and he will be fine and his family will be fine. He's, he's, you know, hit that, that number that maybe we can talk about in a little bit here. I was clearly on the path and we thought, you know, at the beginning, wouldn't it be fun to kind of document like, you know, someone that's there kind of reaching a hand back and saying, here's what I did. And then someone that's on the path saying, here's what I'm doing. And you could kind of vet it out and say, does this really work? Does this work for someone that's just on it? Not just someone that said, hey, look at me, I'm an early retirement guru. And, and it works. If you cut your expenses and you don't have risk and then you position yourself to do different types of startups, opportunities open themselves up to you and it's kind of like creating your own luck. And this experience isn't just my own tale, but I've seen this mirrored in the lives of hundreds, if not thousands of people in our community that are making these somewhat unorthodox choices but getting these radically awesome results and they're excited to share them with us, which kind of creates a virtuous circle in that we, we kind of create a platform, we talk about these ideas, what we're trying to do, people tell us how they one upped us, right, how they did it better, and then that gets put back in the pipeline and the ideas get more concrete and they just, and we get a little bit more focused. And what you start to do is you put together a roadmap of ideas. Like it all starts with, let's just go back and talk about what is financial independence, right? You have this equation, what you earn minus what you spend is equal to the difference of the gap. That's the ultimate equation that all of us are subject to. But how you tackle that equation is what makes it fun. And you can focus on the income, we could blow up the income game and that all that takes care of the equation. We could focus on the frugality game, the expenses, and you could crush that side of the equation and it creates such a low level of risk that almost anything is possible. And then finally with what are you going to do with that difference, how are you going to optimize that difference? And so that's what creates virtually unlimited possibilities for how the story that you want to tell, the roadmap that you want to create, and it's just fun to be a part of it.

Right? I love the whole kind of thinking about it. Much more broadly, I think most people, they're so focused on, hey, go to school, get my degree, incur likely a lot of debt. I mean, there's so much crushing higher education debt out there. And by the way, just as an aside, I have a 18 year old who's applying to school right now and we're looking at the whole financial aid FAFSA process and everything else. And it's definitely daunting. And I've talked with him about, you know, you don't, you want to be really thoughtful about incurring a lot of debt.

Let me just throw some math at you just to like to really cement that. So, you know, I came out with $168,000 in student loan debt at the age of like, let's see, I was 28 years old with 168,000 in student loan debt, four years to pay it off, back to broke at 32, and then I have a pretty good income, so I can go forward. If you were to contrast that with an individual that graduates, you know, high school at 18 years old and figures out a way to get a median income job, a $50,000 a year job, and they can save 50% of their income either because for the first four years they're doing some form of house hacking or living with roommates or living with their parents, whatever, they're a little bit more extreme on the front end. And Instead of going 168,000, they actually, over the first eight years or 10 years of their earning years, actually were to save $168,000 a year. So $16,000 you try to save at the age of 28, you have 168,000 do, and then from there on, you are borderline financially reckless. You never save another penny. You only live paycheck to paycheck. You don't accrue debt, but you don't worry about savings anymore. At the age of 50, if that money were invested and you were earning average, maybe 8% rate of returns, like that's basically it, you're a millionaire. That's what it takes, that one decision. So then the question is, it becomes just solve the problem. And for the 18 year old, it's like, well, how can I get a job that makes a median income? And you can get an associate's degree as a nurse and make $140,000 on the West. I mean, that's like two years of education. You can be a coder and do a six month class and make 50 to 60 thousand dollars a year with like less than $1,800 investment. It's like, and it doesn't matter, like, forget these examples, these just two that have popped up on my show. But I guarantee you that there are hundreds and hundreds of these. And what if you could build a portfolio and you're just picking which one works for you and you're like, it would be kind of cool to have basically got to the point where I'm guaranteed to be a millionaire before I'm 30. Yeah, that's kind of cool.

Totally. By the way, one of the things that I'm a personal champion of is just teaching personal finance, making it mandatory in high schools. It's not mandatory. And many students, most students don't learn it. And I think it sets them up for a lot of downside. You know, that's part of the reason we have such high credit card debt in this country. And you know, people that are less thoughtful or they're just less aware in the beginning and they might incur before they know, before they really are aware of what's happening, they're like, oh great, I graduated, I have $100,000 in debt or $150,000 in debt. And then they're spending the rest of their life, you know, kind of slaving away on how to pay it off.

Because that's the thing, right? You lose that deck. The average millennial right now is losing that first decade to paying off their student loan debt. This, you have to go to college. You have to go to college because college is the only way to guarantee success. And don't worry if you can't afford it. We've got your back with student loans. It's a human right that everyone should be able to get student loans, go to school and okay, fine, but the problem is like, you know, this naive kid doesn't realize that you got to pay those student loans back and you got to pay it back with after tax dollars. And it's going to take a while. I mean, it's just, it's, it's going to be harder to pay them back than it was to take it out. That's a scientific fact. And if you, most of us, many of us lose that first decade and we wake up in our 30s, and hopefully in a perfect scenario, you've paid off the student loan debt. There are many people that just assume they're going to have student loan debt into their 50s and beyond. It's going to outlive them. And this is just a problem. And this kind of goes to a quote by Jim Rohn. You're the average of the five people that you spend the most time with. If that's accepted as a societal norm, you're always going to have student loan debt, then you're just going to accept it. But if you surround yourself with people, say, oh, heck, no, I'm going to do something different, or I'm going to pay it down, or whatever. If you can move yourself to a tribe of those individuals, then you're going to end up with such a different outcome, and you have the option to essentially retire or have the option to work decades ahead of your peers, but it's your choice, right?

Yeah. Well, I think that's what's so amazing about the community and seeing success out there. Right. Seeing kind of normal people achieve this, and that's obviously working with your community, where people are like, hey, I've done this. It can be done. I'm on the path. I see it in the Facebook group that you have, where people are sharing their. Their successes along the way. You know, I just paid off this debt, or I just put away my first 100,000 or whatever it is. Right. And I also saw. We'll talk about this a little bit later, but, like, kind of the. I think the stages of fi are pretty interesting. By the way, one quick note before we move on to. From the getting started in your life part of this, I just want to give a shout out to my. I have a half sister who is in the Marines, and she had this. She kind of went through this where she graduated high school. She was thinking about what to do. She was like, all right, do I want to go get an associate's degree? Do I want to become a chef? Do I want to be, you know, this or that? She wasn't quite sure. And then she ended up joining the Marines, which, you know, was a pretty different decision. And, you know, she's gone through. Now she's in the Marine Security Group, but she has saved, you know, probably 70, $80,000. She lives very efficiently. She's really thoughtful about it. Yeah. And she's in her early 20s, and when she comes out, you know, the GI bill pays for a huge chunk of school. I think she may actually come back out and become a nurse or something. But yeah, she's going to be set up much better than many people and she's really thought about it. Now, granted, she said give up a big chunk of her life to the Marines, but she's also been in different parts of the world and it's worked out for her. But I think that approaching it, being thoughtful, trying something different, working well for her. And side note, too, shout out to the military guide, Doug Nordman, who writes a lot about this and really helps people in the services be thoughtful about money.

Oh, Doug's fantastic. And yeah, absolutely, congratulations to her as well for what she's accomplished. That is no small feat.

Yeah, she's kind of doing what you described, right, which is like, hey, I'll try to live really efficiently, save money in the beginning and then be set up. And she is investing, she's asking good questions about how do I invest and, you know, how do I keep my costs low? You know, maybe she's even a member of this audience. I'd love Choose Fi. I don't know, I'll have to ask her.

That's awesome. No, you know, I was thinking about it. You know, this isn't just for. This isn't just for 22 year olds or 18 year olds. Like, since it's just based on math, it's not based on your age. Like, you didn't if you woke up and you're 35, you're 45, you're 55 and you're like, oh, man, this would have been great if I had found it 20 years ago. What's amazing is I'm going to be upfront. This is not get Rich quick. And that's a good thing. Get Rich Quick usually is a scheme that ends up with your money in someone else's pocket and maybe a little bit better and looking for something else. But it is Get Rich Quick. Ish. And Get Rich Quickish can work every time because again, it's just based on math. And here's the math. If you save 1% of your income every single year, so you have a 1% savings rate, you have to work 99 years to replace that single year, right? So you work 99 years, you get one year off. If you bump that up to a 25% savings rate, it's one to. It's three to one. So you work three years and you have one year off. If you can save 50% of your income, that means you work a year, you'd get a year off, essentially. And if you can stack enough of these wins together and do it for a relatively short period of time, like 10 to 15 years, through the magic of compounding. And by having these in solid investment vehicles, you essentially create a perpetual money making machine. I mean, essentially what you do is, is the compounding gains from those investments provide enough to support your lifestyle for at least 30 years and probably for the rest of time. And this is based on. I know you talk about this all the time, Steve, so 4% rule, that sort of thing. This is heavily leaning on some of those concepts and ideas, which is probably outside the scope of what we're going to talk about right now. But that's just incredible. So put yourself in the perspective of someone that has made, has not been aggressive with this. Maybe they don't have a ton of debt, but they have not saved anything. You know, they got all the toys and they've paid them all off, but they haven't saved anything. They're waking up at 45, 47 saying, you know what? Retirement is kind of coming around the corner and I probably should get serious. 10 to 15 years, that's amazing. Think about that. You can sharpen, you can, you can sharpen yourself down, you can focus, you can come up with a strategy for yourself and you can have an incredible traditional retirement. You know, people that are pursuing early retirement, by definition that is going to include, include traditional retirement. It's the same tactics and that's very empowering for people that maybe are finding this a little bit later in life.

I totally agree. I think that that's one thing that was really huge when I was just reviewing your site. The fact that you kind of say, hey, this is a 10 to 15 year process, but it's totally achievable. I think that makes it much more real for many people and certain. Right. I think that's the big thing with kind of financial planning in general. It's always been kind of this hazy thing. It's like, hey, most of financial services is just like, save a lot of money or save 15% and just kind of keep piling it up. What's the right number? Nobody knows as much as humanly possible because all of financial services makes money when you have more money piled up there traditionally. Now people in your community and the fire community, they're much more cognizant of like, hey, what are the fees I'm paying if someone's charging me 1% to manage my money? Is that good? Not really because that's potentially 25% of your actual earnings every year. On your money. But yeah, it's crazy.

You know, how many people don't know what the expense ratios are on their investments. Like they have no idea how their investment. Like maybe they don't even know how their advisor is getting paid and how much money that is actually, you know, is coming off the top there every single year. That is a real wake up call. I mean, just imagine that. Put yourself in the situation of someone that's just been blindly doing what they're told, never at knowing, never even knowing what questions they should have been asking and how much money that actually costs. I mean, Steve, maybe you can do this math for me. If you're paying 2% assets under management and you stack that together on a $2 million portfolio for 10 or 15 years, how much money are we talking about?

Well, it's huge. I think for us, our average user is 50 to 60 years old and has a million dollar saved. So we can make it even simpler and say they pay the average asset management fee or advisor fee is 1.3%. They're paying $13,000 just a year for anyone. If 13,000 a year is 13,000 a year. If you're living on 60,000 a year, that's 25% of your living expenses. It gets too big in a hurry. And like you said, if someone starts to pile up a couple million bucks and they're paying even more, then it's just a huge component of your future. It actually has two impacts. It's the cost that you're not capturing and also you're not able to reinvest this money and earn additional dollars on it.

Exactly. It's the 13,000 compounded over 10 to 20 years at whatever percentage we were building into this calculation, let's say 8%. It's an insane amount of money.

Yeah. No, Vanguard did a study on this. It ends up being like 30% of your returns over time. So it's just massive. And the good news is more people are waking up to this and you know, groups like I was talking to Rick Ferri about this, but, you know, groups like Boggleheads, you know what Vanguard is doing in terms of just driving fund fees to the floor. Right. And creating a fee war out there between Vanguard, Fidelity, Schwab. It's helpful for the end consumer as long as they know to take advantage of it. And that's the whole back to education. We're all about education here and kind of awareness. And so I think that's a big part of what choose a Phi. Groups like New Retirement and Other groups are bringing to the table. All right, so before we go on, I'd love to just kind of hear from you since you're going through this. I know that you, you use different tactics, right? House hacking, travel rewards, managing expenses, low grocery bills, side hustles like you built. What are the top things that you find working for yourself?

Yeah, that's a great question. And the way that I would look at it is I tend to look at the pie. What's taking up most of your pie? So, for instance, for the vast majority of people, their biggest expenses are taxes, housing, and maybe food. Right? We could start there and then we could go transportation, we could work our way down. We have something that we called like the pillars of fire. And a lot of them focus on these obvious expenses that most people have in their budgets that you can very quickly make moves on. Now, taxes. Are you taking advantage of the United States marginal tax bracket system and taking advantage of tax deferred vehicles? You know, if you are in a, I don't know, 12% or beyond marginal tax bracket, 25%, et cetera, et cetera, are you maxing out all of your tax deferred vehicles? And so basically, most people in the fire community, once you've gotten rid of the crazy consumer debt, you take advantage of those tax deferred vehicles like your 401k, your traditional IRA, etc. Etc. That's huge. I mean, there's real money savings there behind that. Your housing. Buy a reasonable house or consider renting. I think one thing that is interesting about our community is that we are not dogmatic about buying a house. I think this is something that I actually grew up with. I thought you had to buy a house to make it into the middle class. That was the key to making it into the middle class was buying a house. Now I'm a homeowner. Now I'm a homeowner and I don't have anything against buying a house. But I do think that there's this incredible pressure to people to say you have to. And we've kind of taken a look at some of the math and a lot of times it doesn't make sense. You know, if you're going to be moving in a relatively short period of time, probably like two or three years, it doesn't make sense. If you live in a crazy high cost of living area in many places, it doesn't make sense. You just need to be able to look at the numbers and decide for your situation. But aside from, you know, rent or buy the Other thing is like, do you need a McMansion or do you need a house that actually serves your needs? Like, so many of us have bought into this HGTV model that requires the brand new renovated kitchen, the upgraded bathrooms, the guest suite, everything else. And we are house poor. You know, I mean, we. That we have this massive house and we have to work overtime in order to afford it. We have this amazing car, but it sense it sits unoccupied in the parking lot of our employer's job because we have to work constantly to afford the payments. Does you. Do you own your stuff or does your stuff own you? Are you paying for a storage facility, you know, to store all the extra stuff that you don't have room to fill up in your attic or your basement? Like, just think about that when you buy this massive house. The next immediate thing is, man, the rooms are empty. Man, we need to get window treatments. Man, we need to get the color coordinated. Man, we need to do renovation. Like, there's a reason that they look at homeownership as a way of measuring the economy. Because when people buy houses, they have to then fill the houses. That's a couple examples there. And I can keep going, but like that one's, that one's one that's just very interesting. I have a lamp that has a crack on it and out of principle I super glued it one time. And like out of principle on this one thing, I've taken a stand and refused to replace this fricking decorative lamp. I'm not really hardcore on this particular, but on this one thing, like, I actually won. And we have this one cracked lamp and it's just turned so you can see the beautiful face on the front. But it's got a very indiscernible. It's got a very indiscernible crack.

Yeah, well, I think that the main thing, my main takeaway here is it's just questioning what you spend your money on, right? And looking at what things cost, I think so many people, they go through, they just kind of grab stuff at the grocery store or when they're getting healthcare or whatever it is. They don't necessarily look at the cost of things. And very often you can find much cheaper alternatives or just think creatively about it, right? Do I want to go to the movies or can I go catch a free movie at the library? Or are there programs in the community that are just available to me? Maybe people don't even ask that question. But if you look around, there's actually a ton of stuff that you can do everyday life to just bring your costs way down. It makes a massive difference.

I mean I could definitely go through a few more. You know, we talked just briefly about a car, but like a lot of people say is it a new car or is it get it? Should I get a new car? Should I get a used car? You know, frankly, while probably, while probably a used car would be a better choice in most cases. Like let's just say you get a, instead of getting that 40 or $50,000 car, you just get a reasonable $20,000 car. A new car, $20,000. But then you drive it forever. This is what my co host did back in 2003. Him and his wife got I newish cars. New cars. And I think he chose a, you know, a nice reasonable choice like a Honda Civic and he just drove it forever. And so many people think that it's just okay to just manage the payments. Well, I can afford $200 a month. So every five years I'm just going to upgrade my car and then I'll just have that forever. The difference between buying a car new, a reasonable car new, and then driving it for 15 years before you replace it and then repeating that process three times, like over a 45 investing, a 45 year investing timeline literally between that person and the individual that manages the payments and has that 250, $300 a month payment forever. That's a million dollars. That one choice right there is worth a million dollars. I mean so you know, it's interesting that it's you, you think that sometimes these are little things. Maybe not the house. Most of us recognize the house is kind of a big deal. But the car, really the car and the things like maybe the cell phone, you know, for instance, I don't use a $200 a month Verizon phone plan. I use, they're called MVNOs. They basically run on the lines. I'm sure you've seen ads for it. In my case, I use one that's actually done by Google. It's called Google Fi, but there's several others. Republic Wireless is another one. And Instead of paying $100, $150 a month, you can get a phone line for, I don't know, $20 a month, $30 a month, something like that. It's a very reasonable price. That's another example. And then food and I probably should have moved this up. People that aren't tracking their finances hemorrhage money on food and entertainment, dining, alcohol, whatever, that, that is just a black hole for your budget just by the fact that you're not tracking it. If you're just, hey, we're going out with our friends this weekend, you just, you just don't look at it or hey, you know, I don't really feel like making something from scratch. So we're just going to go buy and bring in. That could easily swallow up 12 for a family. $1200 up to $2000 a month. I'm sure there's people that go well over that without blinking an eye. My co host uses something called the $2 per person per meal rule. And I've use this with some success. I kind of alternate. I'm not quite as like hard line on that exact number, but I think it's still such a reasonable term. So like what's a reasonable amount to spend on a meal? And so for Brad, it's $2 per person per meal. So if it's a one person, then that means every day you're spending $6 a day, right? And then times 30 days would be $180. Let's say you screw that up and like you just double it, right? That's $360 a month per person. If you use a template like that for your life, it's going to save you almost, almost out the gate on month one, it's going to save you $500. And if you can stack that together again, remember we're talking about doing this for a relatively short period of time. If you can do this year over year, you're talking about tens of thousands of dollars. And because we're talking about such short, compressed timelines like, well, does it matter $100 a month here, $100 a month there, using the 4% rule, for every $100 a month that you can save, every $100 a month that you can cut off your budget and it's $30,000 less that you need to accumulate in that total pie. To say that I reach financial independence, that is incredible. Incredible. The power of these small gains and it's frankly, it's the aggregation of these marginal gains that thrust you to the outcome that you're looking for.

Right? Well, I think it's, I will say for many people, if they listen to you and say, okay, you know, two bucks per meal, depending where they're from, they're gonna be like, that's crazy. I, I think that data that actually does show that Americans can eat at home for, you know, four, four bucks or something like that, or three bucks. I mean, whatever it's actually not that bad.

Even if you're not super hard lined about it. Let's just say that you're just kind of watching it. You're using that $2 per person, per meal as an anchor. Like, for instance, all of us know you can get oatmeal and eggs for nothing, right? I mean, that's gonna cost you 40 cents a serving. And that's a, you know, that's gonna give you some pretty good macros there if you're watching your nutrition. But you also know you could spend $20 a pound easy without blinking an eye on steak. So, like, it's not that you need to eat all beans and rice or all caviar. It's that you have a blend of the two. You have some meals that are very inexpensive because you know the price of these calories, you know they're nutritious. And you have other meals that are gonna be more expensive and you just blend those two together. And then when you go out and you get servings and you know that you're going to be going to this, think about what it would when you're, when you're anchoring yourself at whether it be $2 per person, per meal, whether it be $5 per person, per meal. But then you go out and you get a dinner for the family and every plate is costing you 30 or $40 and you stack one of those a week. Like, you can see what this does. And so part of it is a lot of it kind of goes back to convenience. Most of us feel like we're so overworked, we have so little time that we just need to use the convenience of delivery, the convenience to take out the convenience of restaurants, we don't want to do it. If you can figure out how to build strategies in place to actually both reclaim time and then use that time to make clean meals, there's other benefits for you. Far outside. Far outside. Just the economics. I mean, your health comes into this. And many people find when they actually have a little bit of space and can take the time to actually make some meals at home, maybe cook in batch, right? Because you don't want to make a meal every single night. Maybe you cook once or twice a week and then you have those meals throughout the rest of the week. If you can implement some strategies in your life, like there, not only is your wallet a little bit fatter, but your waistline gets a little skinnier too.

Yeah, totally. I heard at the. Actually the last Vincon, I heard Mr. Money, Mustache Peter or Pete Kind of talking about his approach and he said, you know, step one is just track your expenses, just understand what you're spending.

I think he said step one was buy a bicycle. But right behind that, track your expenses are pretty good too.

Track your expenses. And then, and then, you know, you know, the simple math is try to get to, you know, the lower you can get your expenses, obviously, the quicker you can get there. And then really it's, you know, 25 times. If you can get your net worth to be, or your investable, you know, Savings to be 25 times your annual expenses, you're independent. You know, assuming a 4%, you know, drawdown. And you know, this doesn't have to.

Be, this doesn't have to be limiting. You know, I think some people, maybe for better or worse, you know, think this is like an extreme frugality play. This is just a life optimization strategy and it just shows you what your number needs to be like. For instance, I do know people that are planning on living on 30 something thousand a year. I know other people that are planning on a very luxurious 100 to $150,000 a year with no mortgage, no car payment, no debt. I mean it's basically 30 to 40k of core expenses and then like 60 to 80k of just slush money. That money goes very far when you don't actually, you know, have any, any actual bills. It's just all discretionary spending. And I think that's the thing. You need to figure out what works for you, what your number is. But it's hard to do that when you have no idea how much your life actually cost.

Totally. I think a huge part of this is really having in terms of secondary benefits. You know, there is a really a lot to be being mindful and I know intentional is overused, but thoughtful about what you're spending, what you're spending it on. And just by thinking about it and having that some scarcity in your life where you are thoughtful about what you're spending and why you're spending it, hopefully it makes you appreciate it more, be more grateful and that all those things lead to people being happier. I think really the sense of control that people have when they're like, okay, I'm in more control of my destiny and I understand the path I'm on and what I'm doing, that's game changing for people and their present and future happiness.

Yeah, absolutely. Couldn't agree more, man. I mean that's really, I think I mentioned it. This is a life optimization strategy. And then Once you get, and frankly, let me come back to this, you get the control, you get most of the benefits of financial independence long before you hit that magical number. I kind of omitted a small amount from my story. When I was telling you, you know, my situation and going choose Fi full time, I actually was doing this side hustle at the same exact time as, you know, working full time. So I was putting about 40 plus 45 hours in at work and then choose Fi, as it was growing, was taking up another 30 or 40 hours and I was starting, I was starting to hit a wall. And there were a bunch of things that were kind of landing at the same time. There was, there was a documentary that actually wanted to come film with us and talk a little bit more about this. And it's gonna be released in 2019. So that's something that, you know, your listeners may be interested in later on this year. It's called Playing with Fire. And there we were gonna go fincon, our first fincon. And then on top of that, I was, we were due to go visit my wife's family and she's from Zimbabwe and we, you know, Zimbabwe is a 20 plus hour flight. To get there, it's not something you do for two days and you come back, you need to, you need two days just to get over the jet lag. And so I was planning to try and take two weeks to go do that. But you know, in America, most corporate jobs, employees get 20 days total. 20 days total of. In my case, it's called PTO pay time off. And that was divided between your sick leave and your regular pay. And while you could have that time throughout the course of the year, very rarely could you take it all together. And there's no way you could do all of that in this particular period of time. I wasn't in control of my schedule. I just, I didn't, I couldn't really make those sorts of decisions. Decisions. I checked the company policy and I saw that they had something in there called an unpaid leave of absence that you could apply for and get conditionary approval. And so I did that. I went through that process and I kind of explained to my boss at the time, exactly, you know what I'm telling you, I have all these things. I just can't keep doing it all. The pharmacy is in good shape. Would it be possible for me to take a three week unpaid leave of absence so that I can round all this stuff up and then I can come back? To which my boss said, I don't think it's in the company's best interest for us to let you do that. And because of everything that I laid out for you, because I'm following the same steps I'm talking about on this show, I was able to say to him, I don't think it's in my best interest to stay. And you get that. I mean, I wasn't at financial independence. I didn't have 25 times my annual expenses, but I had several years worth of savings to cover my living expenses. I knew that this isn't me burning down the house. I knew I could go back or go across the street to a competitor. And I had a little side hustle that was just starting to cover all of my bills. And so the power comes to your side of the court long before you reach 25 times your annual expenses. But you know what? If I had had all this debt, if I had had an expensive McMansion, a car payment, I would not have been fiscally responsible for me to do that to my family. Right. We would not have been. Okay. And you have to make sure that you can take care of your family first. Pursuing financial independence gave me the ability to make a choice that was in my best interest and my family's best interest in the construct of a very low risk lifestyle.

Right. Yeah, actually. Right. You know, on that note, I want to touch on the stages of FI and it's, you know, you were, you know, part way there. I was looking on your site and kind of reading through some of your previous podcasts, but $100,000 saved, right? Or two to three years of spending. You were there being kind of halfway to FI in terms of income versus expenses getting to lean FI in terms of you can be financially independent with no discretionary spending. Flex Fi 20 times annual expenses, which I thought was interesting to call out, that says 82% chance of success over your life, that you'll never go negative. And then full fi 25 times and then fat fire 30 times. So it was actually great to see that those stages kind of laid out with the, with the multiples.

Yeah. And we got some of that from Joel from 5180, but it was kind of. It's kind of, it's kind of nice just to map it out and say, hey, it's not binary. Right? It's not. You're starting like, hey, financial independence sounds great. Okay, well, wake me up in 15 years and let me know it's over. No, we want. We're humans. We want to see progress. We want to check the box we want to know that we're getting closer to our goal. So how do you actually do that? Because, frankly, when you get to 50%, you know, when you get to point where you have several hundred thousand dollars of net worth, like, that's really when your portfolio starts kicking in and doing all the work for you. For the first, like, 50% of your path to financial independence, you're doing the heavy lifting, right? You're doing the. You're taking your savings rate, what you're not spending, and you're putting in your investments. But you're going to get to a really cool place. As you've been on this for six, seven, eight, nine years, you're going to get to this crazy place where you realize that your investments just added, right, they're actually growing by more than you're actually putting in. So they're working harder than you are 24 hours a day. And that's when you're like, man, I don't think I can screw this up. I got this. And it just keeps getting more and more and more. And so you'll realize that long before you get to financial independence. And, like, that's the feedback loop that you need to keep yourself on this path. And that's why financial independence, of course, it's personal finance, but it's like an elevator pitch for personal finance. How can we package something that for so long has just seemed like academia and make it real for someone that, like, this is a human being that wants to live a better life and is trying to figure out how to get there?

Right. Well, you're delivering on the vision here where you've got, you know, you've built this community and you've got the virtuous feedback loop happening. People are, you know, hitting these metrics and sharing with each other and encouraging each other, which I think is awesome. You know, I'd love to talk a little bit more about your audience, but first, I just want to ask you about, like, when you first started this and you did your first podcast back in December 2016, you know, you said you and Brad kind of connected. You were like, hey, we just want to talk about this, you know, And I guess you'd never done it before. Like, what? You know, why did you say podcasting versus blogging? And. And how did you kind of get the word out and how did the initial growth go of the emergence of the community?

Yeah, this is interesting. So back In December of 2017, when I pitched Brad on the idea and he said yes, frankly, I was just as shocked as anybody else. This isn't like we didn't know each other for years and years and years. We just knew that we're both inside this community. We're both passionate about talking about it. And maybe even more important, at the time, I had met him in real life. We had gone and gotten lunch, and we had kind of shared a meal. And so that was like, real life connections are a really big deal, which maybe is worth circling back to at some point. But we started with choose a5.com, the website, and the pod podcast at the same time. I think I had started the website first and then decided, hey, we could do a podcast right along with this. And both of us, like, as soon as we had both, because he had done some writing before and I'd written a couple articles on the website. But as soon as we did our first podcast episode, I think that's when we said, we love this. Like, this. This is our preferred medium. And. And I suspected that would be the case for me. I'm a verbal guy. But in Brad's case, I think it was almost a surprise for him. And we recorded, like, a couple episodes privately. And that's a cool thing. You can just record, see how it goes. And, like, you don't have to release it if it's. If you don't like it, you could just redo it or whatever. You know, that's. That's the amazing thing about podcasting. You get the same benefits with blogging, but for the sake of this conversation. Anyways, these episodes that weren't released, we had about four of them. I just, you know, we recorded it, I edited it down, and then I gave him back to him, and he played it and listened to it with him and his wife. And his wife Laura said, man, you guys are actually kind of good. Like, you're good. And she gave him this. I'm gonna cough. Give me a second. She kind of gave him this. You know, the level of affirmation that there's something really here, like, I'm listening to you and I'm connecting with you at a different level over this content. I think you need to just go for this. And so I think with that in mind, like, suddenly he went from, like, hey, there's no downside to this, which. Right, that's. That's totally true. He's not doing this for the money. He never needs to work again. Like, it's totally fine. But it lit him up. It lit that spark. And, you know, like, what if you could tap dance your way to work every day like Warren Buffett, right? Doesn't need the money. He's not doing it for the money at this point. He gets a level of fulfillment from that. And I think there's many other people that can identify with that same thing. And it actually adds a lot of power and a lot of flavor to this. And I wanted to actually point out that so many of us, like, try to make a decision that is gonna last for the rest of our lives. At the age of 8, at 17 or 18, right? What do you want to do? What are you gonna go to college for? What are you gonna get your degree in? And once you make that decision, there's this thing that you're baked in, right? You've set your path, and I hope you enjoy it, because you're going to have student loan debt that's going to tie you to it. If you can reject that model and decide, well, what is it that I actually want to do it. And do it from a place, a strong financial base. In some cases, that means you never waste those years. In other cases, it means you get to reclaim your best years and reallocate it to something that you actually enjoy and can make you money. There's no rule. I mean, I guess there is theoretically something called the Internet retirement police. And so they would say, well, Jonathan is not retired. And you are right, my friend, I am not retired. But that's fine. I don't. I don't care. That's fine. I will probably never retire. I mean, this is something that I really love. And what if you could get to that place in any field, in any job, what if you could had the liberty or flexibility to just try everything until you find something that you like, because you're not doing it from a place of financial scarcity. Like, for instance, with my free time now, I'm trying everything. Like all these things that I never thought I had the bandwidth to go and put back into, like woodworking or painting or drawing. Like, I've always said to myself, I'm a bad drawer. Well, how do I know that? I never really did it. What if you could spend hours and hours and hours just on YouTube learning how to draw? This goes to something called autonomy, mastery, purpose. It's a talk that Daniel Pink gave. I think it was a TED Talk. And this is what humans crave. We want autonomy. I want the ability to work on what I want to work on, when I want to work on it. I want mastery. I want to be able to spend weeks and weeks and weeks Trying to figure out one stupid little problem that no one else cares about. But it means something to me. You see skateboarders do this right kids with Minecraft and purpose. I want to know that what I'm doing actually matters. There's a few others that we've kind of landed on as well from our community, identity and connection. And this is what doctors grapple with. Right. When you're a doctor, a doctor is a big part of your identity. And then sometimes when you're trying to figure out if you can move away or leave that, you got it, you're trying to figure out where are you going to be getting your identity from and connection. Like can you find your tribe, can you find your people? Can you find a community of like minded individuals? So consider this like five cocktails that are going to make for a very happy existence. And you don't have to and you probably won't get all of them. But if you can go through life picking out things that light you up, that land on some of these boxes, land on some of these checkboxes, it's going to be incredibly powerful. And then to be able to stack that with a frame of, well, what does the mass say? What do I need to accomplish to still hit my goals? That's why it's a strategy.

Yep. Well, I think it's awesome to hear you kind of describe the autonomy, mastery, purpose and also the identity side of this stuff. I think one thing that you're going to see though is, but I totally agree with that. I think that fire and pursuing fi gives people this purpose when they're doing, especially people that are really hardcore into it. But once they get there, they really hopefully have thought about what do they want to do next or started to explore some of this stuff early on because I think also you can have, okay, now I'm completely independent. I don't really have to do anything. So what am I going to do? Do you see any of that in your community where people achieve it and then they're kind of like wandering around the woods like, okay, what's next?

You know, it's so interesting. I am sure that at the periphery I have seen or heard somebody mention something like that, but I don't see a lot of it. I really don't. I mean this is that thing. Well, what are you going to do with all your free time? You know, my frame, what I see from my friends and from the people that are pursuing this is how did I ever have time for a 9 to 5? Right? How do you have time to fit that in. I'm like, I have so much that I want to accomplish, and a cubicle just isn't part of it. You know, it can be a part of it for a period of time if you find that balance. But, you know, the world opens up to you. And so, you know, I never want to be the guy that's like hating on the person with a pina colada on the beach. Like, if that was what you wanted, like, enjoy that. And when it gets old, feel free to go do something else. But it's your choice. You've earned it, that's fine. But I don't think it's what the driving force is for many people. It's not what are you running from, it's what are you running to? Like, once I do this, then I can fully invest my entrepreneurship goals. I can find. Like, think about it. Like, my friend Alan Donegan from Pop Up Business School calls it a suit of armor. If you can have put on financial independence like a suit of armor, it doesn't matter what people say. When you write three copies of your book and all the publishers reject it. It doesn't matter when you write a movie script and you go all in on this hand and Hollywood doesn't accept it. It doesn't matter. You're doing it for different reasons. You're doing it for you. And if the world accepts it, great. If not, it doesn't affect you financially. And what this means is, like, people that are being, are able to be unreasonable, people that are able to think outside the box, people that can do these things not for the money, but for themselves. Like, people are drawn to that like flies. You know, it's just, it's attractive to see that. And you end up producing more authentic content, more authentic work. And I think you we're going to be able to continue highlight ways that people have actually been able to pull this off.

Yeah, totally. So, you know, we're, we're talking. I'd love to get your take on, you know, where you think most people are in your audience on the journey to financial independence. Do you see a big chunk of them either at the beginning stages, middle, or getting to the end? And do you see that changing over time?

Yeah. This is why the community is such a big part of this and why I'm excited to actually have a group to be able to track this, track the progress. You know, I would say probably weekly we have someone announced that they reach financial independence. Notice that on our show we put a little bit More emphasis on the financial independence than on the early retirement. Like I don't want someone to tell me, in order for someone to get credit for it, they don't have to tell me that they quit their job. They can if they want to. But financial independence is financial independence, right? You, you reach your number, you hit your, you hit your stride. But having said that, I would, based on some just informal numbers that I've seen in our group, I would say that the vast majority of the people are within five to 10 years of financial independ. And well, and maybe I should spread that out or within five to 15 years of financial independence. But we do have a significant segment of people that are there. And what's interesting is you would think, well, once you're at financial independence when you just stop listening to the show, when you stop being a part of the community, wouldn't you just like want to go off and do your own thing now? But I think it's because like you made a different choice to get there. You don't get to financial. Very few people get to financial independence by accident. It requires intentionality. It requires you making choices that other people weren't considering, weren't aware of or didn't make. And so many people want to kind of stretch their hand back and say look, I did this, it really worked. Here's how you can do it too. And there's actually a really large segment of people that are right at that finish line and we're capturing their goals, their dreams, their aspirations. We're getting again that feedback loop of putting that back into the community and letting the next year, the next year's graduates essentially kind of say well we're right there behind you and we're looking forward to getting there. So I do not, I'm sure at some point if you were to interview me a year or two from now, our community is more and more interested in this type of, you know, data. We could put a poll out there and see if we can get some buy in and kind of get a sense. I suspect the vast majority of the people in the community are kind of still in this five to ten year window. But I bet you, and this is, this is something that I noticed myself and I know other people once you start tracking how long it's going to take to reach financial independence, like over a period of a couple years, you keep winding it down because your income goes up, because your expenses get lower, because you figure out an optimization strategy. Like although we tend to think about life as a snapshot Right. It's really a moving picture, and things are always in flux. And people that are now thinking about, how can I focus on this equation? How can I both increase my income and decrease my expenses? And stacking these gains together, like you keep winding that number down, you may have projected it's going to take me 15 years. Two or three years later, you're like, Man, I'm only five or six years out. I mean, that happens. It happens pretty quickly. And as you get closer, you're like, you know what? Maybe it would be worth it just to be even a little bit more intense so I can pull this off. And conversely, some people, as a result of maybe pursuing the income side of things, maybe make a shift to go to a different field, a different sector, a different company, and suddenly what was a toxic work environment has become one that's full of joy, maybe hit the brakes and say, you know what? I don't need to pursue this as quickly. Basically, they're like that person, that case stud that we talked about at the beginning, the guy that saved up 168,000 by the time he's 28, and he's basically got it set and figured out. Maybe they're kind of like in that situation where at this point and they can't really screw it up, and now they're just kind of on autopilot to the finish and they're just excited about the journey.

Yeah. Well, it's awesome to hear that you're seeing the kind of community help each other and reach back and teach other people. I mean, I think that's one thing that we see and hope happens in our community as well as people hit. You know, we're serving kind of the more traditional retirement folks, but we also believe that there's so many lessons from the kind of fi group, because for our kind of traditional folks. But even as people are in their 50s, 60s, and getting a little bit older in life, people are living longer, and they have a lot of human capital and knowledge to share. And I think people want to do that once they're independent, either younger or older, it's like, okay, how can I help other folks? You get a lot of satisfaction from helping other folks. So it's kind of great to see that that's emerging and happening inside your community. So what do you think the big factors are that are driving the growth? I mean, there's the podcast, there's the content, there's kind of people just talking to each other any other big. And you mentioned kind of the face to face the live stuff that you're doing. What do you think the big things are that are driving this?

Yeah, that is a really good question, and it's one that I've really tried to give some thought to. And let me just kind of go back to kind of the history of the Fi or Fire movement. Vicki Robin, when she had the attention of the entire country, it faded, right? It slipped away. What happened? The content's still good. It still works. But I think in the 1990s, what didn't happen, what we didn't have was social media. We didn't have our own platform. And so it kind of went through, like, when it was no longer fashionable, right? When it was no longer in the best interest of the mainstream, I guess, to be covering it, it didn't have a place for people to come together and share their own version of the story and what it was doing for them. That was the 1990s. So circa 2010, when maybe Jacob from early retirement Extreme starts talking about extreme frugality. I mean, this guy, in this case, this guy's living off, like, $7,000 a year. I mean, it's. It's incredibly intense, but it reminds. It's very reminiscent of some of the stuff that Thoreau was talking about. Going back to a simpler life, rejecting consumerism, that sort of thing. People, like, jumped back on people that had found your money or your life. Just ran to his blog, and shortly after him, maybe like a year or two later, very, you know, very close to that, a young upstart called Mr. Money Mustache started writing. And, man, he just blew up. I mean, millions and millions of page views. It was kind of his, like, next inflection point. It was like. It may seem a little bit hardcore now to some people that are like, well, I would never bike. But his way of writing was so authentic and real, and his way of just showing you the idiocy of things that maybe you just took for granted was unparalleled. And people, and rightly so, it just captured the imagination of. I mean, honestly, I would estimate the world probably. I mean, that was probably the largest audience that anybody had had since Vicky Robin up to that point. And that was 2012. And then I would almost say that, like, there was, like, a peak, and then it kind of, you know, it kind of. It kind of does this thing, and it kind of, you know, steady state for a while. And then in 2017, when we started our podcast, we. I mean, we still had that spark, right, that, like, this was even six years after he had written the content. That content, we, we had still carried that ourselves. And there were a lot of other bloggers that were now talking about it as well. But we started with. Hang on, I need to mention two more people, otherwise I'm gonna. It kind of. It kind of hit steady state, but a couple other. It kind of hit steady state, but there were a couple other things that were happening about the same time. Brandon the Mad Scientist spent a bunch of time like humanizing the IRS tax code and showing how early retirees could actually leverage the tax code to both put their money in pre tax buckets and then draw it out tax free. That was insane. And then J.L. collins in this timeline as well, wrote the Simple Path to Wealth and the stock series, which is a phenomenal resources, simplifying investing down to a level that probably hadn't been seen before. I mean, Dave Ramsey is also getting people to debt free. White Coat Investor is doing a lot of the same stuff. And Bogleheads, you mentioned Rick Ferry, the Bogleheads Finance Group also is this wonderful platform of talking about simplifying investing. So it was suddenly easier to get all this information and start to put it together in a linear fashion. And so that's kind of what's happening from 2012 to maybe 2017. And there are a bunch of other flavors of people that were now writing and talking about this stuff and people doing incredible work in 2017. When we started our podcast, Brandon was the only other one that had really done. Brandon the Mad Scientist had done a financial independence podcast. And when we. So I mean, in our minds, like, why isn't this already happening? That was kind of like, why isn't this there? This is what I want to listen to. The closest I can get to it is like bigger pockets, but it's just about real estate. I want to focus on the more holistic picture. We should just do it. And this goes to like frankly a strategy that like anybody should use if they're trying to figure out what can I do for a side hustle, like just find problems, find things that are just obvious holes and then just fill the hole. And so we were like, well, why can't we? Why can't we do that? And so we very early on just created that product in 2017. And I honestly, within about three months we had both created the podcast, gotten a very small audience. And we were the guest on Radical Personal Finance, which is Joshua Sheets. You may be familiar with him. We were a guest on his show. And that episode I think probably got us, you Know, probably the day that we were on that probably at least a thousand people found us. You know, it's not a massive number of people that came and found us, but suddenly, like, there were people that were now listening. And then from there on out, those people stayed with us. And then they told their friends, and they told their friends. And going back to the feedback loop, I think, like, the combination of the information all being there and put together an. Almost a roadmap and then our weekly touch points, and frankly, the community being able to have a community, like, one thing that was always very apparent to me, this is something that I noticed early on, is that when you read comments, like when you read blog posts by Mr. Money Mustache, some of the best information was buried on the 12th pages of the comments, right? Like, when people comment on a blog, it's lost to all time. And very early on, I said to my co host, Brad, I said, this is the best stuff. I mean, frankly, I love the blog post in many cases, but I love the comments. How can we make the comments the show? How can we bring the community in? Because this community is everything. And so that was like our guiding light very, very early on. And we rolled out a Friday roundup format to have a Monday episode where we interviewed a guest or brought on a new topic. Have a Friday episode where we got to talk about our takeaways and bring in audience feedback, but make the audience like the show. This is. This is your show. And I think that's. Frankly, that's when it became a movement, when the audience felt like they had ownership. When the audience felt like this. This is when we. They took ownership of financial independence. This is our movement. That was cemented when one of our listeners, Scott, messaged us and said, guys, I'm a documentary filmmaker, and I think this community is worth capturing. I'd love to. I'd love to come film this. All right, I'm almost there. I'm gonna wrap this up. I'd love to come film with you guys and kind of capture some of this. Like when we knew that there was a documentary happening in 2017, and we were able to put that back into the community. I mean, I actually went back and listened to a podcast episode. It was right around that time. That was the first time Brad said, I think this is a movement like this. This is more than just a thing that you need to do. This can change the world. And we truly believe that. And we kept putting that out there, and at some point, it just became true. I mean, it's A movement. Now in 2016, this wasn't a movement. In 2015, this wasn't a movement. In 2017, our community made this a movement. And now going into 2018 and beyond, I mean, it's having that impact. Recently I saw a Market Watch article that just talked about the fire movement. No context, no explaining what fire movement was. It just assumes that everybody knows what fire, the fire movement is like. When you get to the point where like, everybody just knows what that acronym means, with all the million variations of what it could mean to be on fire, you just know that it talks about very aggressive life optimization strategies. Like that tells you something that you have broke through whatever noise barrier there is. And this could, you know, it could fade. It could hit critical mass and it fade away. Except that it's actually changing lives. Except that the community has a way to aggregate their successes and except for the fact that there is an actual feedback loop to help. Because think about it, it's very sexy to say financial independence. I want to get to, you know, I find it. I want to get to the point where working, working is optional, right? That, that touch point is awesome. And the end point when you're there is awesome. But if there's a, you know, 10 to 15 year window between, there's plenty of room for attrition. But if you have a community, if you have accountability, if you have motivation, you know, you have someone to keep you company as you commute to and from work for several years in a row, suddenly it becomes an imminent reality. And as soon as you realize that, you realize this isn't like an, this isn't something that just a subset of the population does. This is what everybody needs to do. Because by not making a choice, by not realizing that you're doing this, it's costing you decades of your most valuable precious resource, your only non renewable resource, your time. The pursuit of financial independence is merely a way for us to reprioritize our most precious resource, reprioritize our time around the things and the people that we value.

Totally. I think that's, you know, that's a super summary that you just kind of gave about kind of where we've come from, where we are today and what might happen. And I was checking out the Playing with Fire trailer yesterday. It's pretty compelling and I saw it at Vincon as well. So I see things like that that could dramatically expand the audience for this, I think, and make it much more mainstream. But also I see things like there's a lot more volatility in the stock market. I mean, for people that have come up in the last nine years since. Or 10 years since the 2008, 2009 downturn, they have just seen up into the right march in the equity market. So it's like, oh, yeah, I'm going to invest. I'm going to go passive. I'm just going to keep putting my money in. That has totally worked. No risk, very low volatility. Now suddenly we're seeing the return to the mean reversion in terms of like, hey, there actually is volatility. Right. You're going to have to deal with this. And I can see that blowing some people away in terms of the emotional ups and downs of investing and the risk that's involved. How do you see this as you look forward over the next couple of years for the Fire evolution or the fi. Evolution.

Yeah, Depending on when this gets released. We're actually talking about this in depth in the episode that goes out on January 11th. It's called bear Perspective. We actually brought Big Earn from early retirement now on to help us go through it. I'll be honest with you, the stock market, it's wiped off all the gains since the beginning of the year. I haven't batted an eye. It does. It doesn't affect me. But there's two different types of people that are hearing this. So, like, keep in mind, if we're talking about the fire community, people that are like more than five years out, right? Like five to 10 years out. They, most of them, if they've been in the group for any period of time, they've been listening to the show. This is like the best thing that could have ever happened to them. Don't, don't, you know, slap a gift horse in the mouth? Like, no, no horses were hurt in the, in the recording of this podcast. But, but, you know, like, if you can suddenly get the market for 20% on sale knowing that you don't need it tomorrow. Yes. Invest, deploy your capital. Right. That's an incredible thing. And the other half of this is when you have a 50, a 30, a 50% savings rate, like, you're kind of invincible, right. Like, you have so much leverage in your life, so much ability to be flexible, to dial your expenses back. For individuals that are listening to this that maybe are retiring or thinking about retiring right now, I mean, that's where sequence of return risk comes into this. And you need to just kind of understand some of these concepts and know what it means. When I was talking to Big Earn, one of the things he was actually saying is that while historically in the past, you know, maybe like six months ago, he would have been a little bit, say, ah, the 4% rule is maybe more like the 4% rule of thumb. You might want to dial that down. He personally was using like a 3.3% safe withdrawal rate. Now with the new market conditions, if you're still at fi after having had this market drop, like, you might actually be able to be a little bit over aggressive, right? And have a very close to, a very close to a 4% withdrawal rate or maybe even beyond because now the market, for no real apparent reason has gone down. In his mind. Market conditions are actually pretty good. The fundamentals are good, but for whatever reason, the price is down right now. And frankly, currently this is just a run of the mill kind of correction, right? We have these every three years or so you're going to have a correction. And frankly, if you can kind of sharpen your teeth on something that's relatively gentle like this compared to maybe like a 2008, 2009 Great Recession type deal, like you can start to build your, investing your spine, your bone. And I think our community, that's another reason you don't want to do this in a vacuum. Because if you're doing this in a vacuum and all you're listening to is Kramer, like the media, it's either everything, it can never go down. Bitcoin can never go down. It's going to take over the world or the sky is falling. It's one of those two. There's nothing in between. You know, what if this is just what it does? And I think people that are around a community of like men, of individuals, people that are around some of the wealthiest people were made in 2008, 2009. And Warren Buffet has that quote about when everybody else is running, you know, run in with your bathtub and collect gold coins from the sky. Like when you can reject fear and look at a situation like this as an opportunity, when you come out the other side, you're going to be so much better. And so I think it's a mindset and a lot of this is mindset. It's, it's just follow the plan and don't be naive. You know, if you're stock, if you're, if you had a million dollars, the stock market drops and you go down to 500,000 and you're still drawing 4% based on your, you're still drawing 4% based on your million dollars, that is going to be a problem. My friends because when the market does eventually correct, you're going to have significantly out drawn what you were anticipated or expected to have drawn. So like, you need to understand how the math works. It's important to understand what sequence of return risk is. For the vast majority of our community, this is a huge gift. It's like getting 50% off sale right at Christmas. For people that are either planning on retiring or have already retired. For people that are planning on retiring and they were just barely at their number, maybe they keep working a little bit longer. For people that have already retired, just, just don't be naive with your withdrawal rates. Maybe reel it in, be a little bit conservative. It's just be important, know how the math works.

Right. Well, I think that it's so good that you're, you know, that the community's out there educating each other, kind of reinforcing each other and hopefully making good choices. Yeah, totally agree. You know, I think Warren Buffett also said buy when there's blood in the streets. Right? That's when you, when you get wealthy. And I love Carson and you know, AKA big earn as well. And we're trying to build in some of the more complicated modeling around sequence returns and withdrawals that he lays out and does on his site with case studies into our tool as well, because we think that there's a lot to be gained. But it is about making this simpler for people, making it more understandable and not so complex.

I want to drop one more line on there. Just like, let's say that you, let's say that you are pursuing early retirement. Like you're one of these people that just wanted to be early retired. Absolutely. You were going for it and you did it on the bare amount of money possible and it didn't work. After 15 years, you crashed and burned. Like your worst case scenario is someone else's every day. You know, like, it's not, it's, it's a, it is a, it's a turnstile. You can go back into the market, it's going to be fine. But it's like, it's not a risky property proposition. It's just, you have options.

Yeah, right. I was talking with a friend of mine who's a coach and he's like, hey, you know what you can do is play out the worst case scenario in anything. Right? So you're like, oh, I'm really worried about this. It's like, okay, well what's the absolute worst case scenario that happens? Just take it all the way out and you're kind of like, all right, it's actually not that bad. So if you apply that to, you know, this or anything else, I think it really does make it a much more manageable in your mind. I know. On that note, one thing that jumped out at me when I was watching this Playing with Fire documentary, it's like, I think they said 69% of Americans have less than $1,000 saved and 34% have nothing saved. I mean, I know these stats, but it's just so scary to read that and what's actually happening out there. It's so daunting for many people.

Yeah. And we put a lot of emphasis on getting to 25 times your annual expenses. But scale that back for the person that you're describing. Just imagine what it's like to have $1,000, you know, had to have six months of expenses. To have any level of savings at all is life changing. And so if you are trying to hit 50% savings rate and you fail, you know, you only hit 20% or 30% savings rate, you know, that's incredible. That's the best fail ever. And you are crushing it compared to the rest of the world. And so it goes back to anchoring. You want to anchor yourself to people that are being fiscally responsible.

Yeah. Right. Well, we're getting a little test of this right now. I mean, we've got the federal government shutdown. I was listening to NPR this morning, and they were interviewing a TSA agent, and they're like, hey, you know what? If we don't get paid in the next week, we're not going to be able to pay rent. We're not going to be able to pay our electric bill. So it's really scary. But on the other hand, you've got, in groups like yours see people saying, like, hey, why don't you just try not to spend any money except for the absolute essentials in the next month and see what happens? And throwing out challenges like that. And then people do it. They're like, oh, you know what? I did it. And I just saved up a thousand bucks that I never had before. So I think things like that are totally inspiring to people. All right, so we have covered a ton of stuff here. I have another question for you. As we look forward, hopefully this continues to spread and takes off, but do you see any blowback from the growth as this gets bigger? One thing I saw, I saw on Twitter recently, and someone was like, some of these fire people, bloggers come across as a little bit holier than thou. And, you know, like, hey, I've done this and it's easy. And, you know, you're kind of like a loser for not being able to do this. Do you see any of that out there or do you think that's just like. I just happened to notice. I was kind of surprised to hear that.

Yeah, that's interesting. You know, I don't. I haven't seen it. I'm sure that there is someone out there that you know is tone deaf or there was someone out there that wrote an article that was smug or something. You know, I have not personally seen it. I know that that's not, that's not my frame. Like, I, I certainly understand that this is challenging and depending on what your situation is, you may have significant obstacles that you're having to work through. I have a very good friend that actually works with me, Atreus of Ian, and he's a widower. His wife came down with cancer and passed away, and he's raising two kids with autism. He has a lot of challenges that he's had to work through that. Frankly, that's just not my life experience. Life is rarely Pinterest perfect. It's rarely HGTV worthy. You know, there's many people that don't have the luxury of a $50,000 a year income and are maybe battling, you know, frankly, it's minimum wage or whatever. There's just a series of obstacles they have to work through. And I think from my end, you know, and I can't. I can't speak to what every blogger or every other podcaster talks about, but on my end, there are. There's somebody that has it more difficult than you have it, that has, it has had to deal with challenges that you have never had to experience or. And has come through the other side and figured something out that other people haven't. And so the only thing, like Brad and I do not consider ourselves gurus, but what we do have is a platform, and a platform that's growing. And we just want to highlight this meandering path, this unique path to financial independence and all the shapes that it may take. And if we can do that enough, if we can do that consistently over time, we can have a portfolio of 200 respective paths to financial independence. And it's not the blogger path to financial independence, but rather, hey, I'm in the military and here's what I did. Hey, I used house hacking. Here's what I did. Hey, I went and got a coding job and here's what I did. Hey, I, you know, whatever you Know, it's, let's take a look at every single variable that we can come up with. This past week we looked at exploring international teaching opportunities. So like in my personal life, I have a friend that has over $90,000 in student loan debt and is probably making somewhere between 35 and 45 a year as a teacher in the public school system. And like, that's like a, you know, that's a difficult, difficult number to imagine. There's like a baseline of how much your life is actually going to cost. You just can't frugal below that. Right. It only works so far. And to imagine being able to pay off $90,000 with the difference, it's like tough for me to imagine that. And you know, for some individuals, maybe it's like looking at student loan forgiveness programs. Maybe that's an option for other individuals, like you're going to have to figure out how to change the numbers on the income side of the game. Maybe you had private loans because you just didn't realize that the cons to having that. We just did an episode this past week called Exploring International Teaching Opportunities and individuals that weren't able to make enough in the public school system here and actually made the choice to go overseas and be a teacher at an international school making 70 to $90,000 a year plus living expenses and plus travel expenses to be able to travel back and forth to family and just an incredible compensation package. So like, if we can just hopefully over time find things that people are struggling with and then provide examples of how other people have overcome and then slowly get better together, I mean, that's frankly it. And that doesn't have to do with. That's not elitism, that's not, hey, this is just for working class professionals. This is for everybody. But you can't possibly in one episode capture the exact path. And that's why blanket advice is difficult. And that's why I'm so grateful to have a platform that allows us to circle back twice a week and add to the portfolio of ideas to reach financial independence.

Yeah, that's awesome. I love the fact that you leverage the audience and learn from the audience and feed them into the process. And it's clear why you're so successful in terms of. So you bring a ton of enthusiasm and also you're so positive about this stuff, which is great. And listen, I'm super hopeful for the future too. I think that there's a lot of great things hopefully coming around healthcare and technology that will liberate many more people to have a lot more choice in their lives and be a lot more intentional. So I think there's a lot of good things to come. And platforms like you've built are going to be a big part of helping people be thoughtful about how they pursue their lives and what they do with their time, which is, as you said, kind of the scarce resource.

Yeah, thank you, Steve. It's really been a privilege to be a part of it.

Yeah. So on that note, I think we've covered a ton of stuff. I would love to get just a couple final thoughts from you. Where do you think ChooseFi is in three years? And also, what are some, I mean, you've mentioned some of the, you know, original gangster, you know, fire folks, but who are some of the other big influencers for you personally?

Yeah, I mean, that's a great question. There's probably a couple people that I kind of look to as kind of forging a path. I mean, Tim Ferriss being one of those and just continually like finding things that he's interested in and adding them to the conversation and building essentially a skill set. Mike Rowe is another major influence for me. I think he's just frankly changing culture and showing people that there are all these jobs available that you just frankly have taken for granted. And he's doing incredible work. You know, Joe Rogan is another one that just challenges societal norms. It's not one that I listen to a lot just because he is so long. It's like we have like an hour podcast. He's like a three hour podcast, like, how do you do it, man? And respect. But those are ones that really stand out, stand out to me. White Coat Investor is someone that I have a deep respect for. Also his ability to take very, very complex topics and break them down into something that you can implement has been really cool. So those are a couple of resources that I've appreciated. I'm sure I'm going to get off the call and like, oh, I should have mentioned a couple other people. J.L. collins is another one that I've very much benefited from. His book, the Simple Path to Wealth and stock series have just been truly eye opening for me and have provided a wonderful baseline of information. So those are all people that I've certainly enjoyed listening to and benefited from their content directly.

Well, I appreciate that. I'm actually not familiar with Mike Rowe, so I'll go check him out. But we just had Jim Dali from White Coat Investor on. He went live. Yeah, he had a lot of great things to say and I agree with you was really good at kind of summarizing. Here are the things you need to think about for our audience and making it really digestible. That was cool. And then. Yeah. Anything on. Do you have a vision for what ChooseFi looks like in a few years?

I mean, I'm sure I do. I don't really know how to verbalize it, but I think this is going to sound so hyperbolic, but I think it can change the world in some way. I don't know how to express that. I don't know how you get from here to there, but there's something very powerful about knowing that. When you listen to, like, and people tell me this, like, I listened to 200 episodes, and your guest, they changed my life. Like, I'm on a different track than I was then, and I didn't know how to get from here to there, but I do now. And if I had just seen that one time, you know, it would be like, wow, that's amazing. That's awesome. But when you see a pattern of people saying their lives have been changed by something, and they just want to tell everybody that wants to listen and some that don't like that that means something, and it's gonna. It's going somewhere. And so I don't think that, you know, I don't think that this is at critical mass yet. I still think that it is. It is rising into the public consciousness. And I think when you start thinking about personal finance going into maybe the next year, the next three years, like, I think you are going to simultaneously be setting financial independence as a goal. So I don't know what numbers, you know, back that up. I would love to say, oh, I think 10 million people are going to. To be listening to this podcast in a couple years, maybe. I mean, hey, I'm not. I don't have a problem with that. But. But I certainly think that we are far from done with our mission.

Yeah, I agree. I agree with that. It seems like you guys are rising fast, and you've got a lot of. A lot of great things going. So congratulations on that growth. And it, you know, you. It's awesome to have a goal like, hey, we're gonna really change the world and change, you know, thousands and hundreds of thousands and millions of lives. And I agree with you that it's. It can be done. I mean, podcasting is so interesting. Like, so you're Obviously, you've done 100 episodes, and you've got a much bigger audience than we do, and we've done 20 episodes, but both of us come from a place of, like, you know, if you asked us when we were kids, would you be doing a podcast and, you know, think that, you know, thousands of people would listen to you? I'm sure we would say no, or at least I would.

I had someone message me and say they were listening to our podcast, and if they ever hear this, I hope they do. They were listening to our podcast as they climbed the summit to Mount Everest. Like, that's where an episode was listened to. And when I heard that, like, I mean, I could see our stats and see what countries, you know, I think it's been listened to in over 190 countries. And I was. I mean, that was awesome. When someone said they. They were, you know, summoning Mount Everest, I'll listen to the show. I was like, oh, man. Okay. I feel like we've arrived.

I'm gonna. I'm gonna contrast that with a story a guy told me. He's. Which is the total opposite end. He's like, yeah, I was. You know, I was in Wisconsin. I was on my riding mower, driving around, listening to your podcast. But it was. It was awesome. And, you know, your tool is awesome and all this stuff. I was like. I shared that with our team. I was like, this is awesome. Yeah. No, podcasting is pretty interesting because it is so personal, and you can listen to it anywhere.

There's two things about it. I think it's the intimacy that comes through, you know, for it. If. If you can connect with something, it gives you an ability. There's a. There's a level of trust that's built up over a period of days, you know, weeks and months. That podcast can give you that I don't think any other platform does. Like, when you're. When you're just put yourself in a situation of a reader, if you're just reading a website or you're watching a YouTube video, usually you're, like, multitasking, right? You're competing with multiple things. But I would suspect if I were, you know, when I'm a listener, I'm doing, like, one of, like, two or three things. I'm, like, exercising. So, like, a run or a workout, I'm commuting, or I'm just going for a walk somewhere. Like, it's. It is a very. It's something that you can simultaneously do while you're doing something else, but also be 100% focused on. Like, this is just what you're doing. You're in your, you know, quiet space, and this is just your time. It's part of your routine. Very few other formats actually give you that. And it's something that I've truly come to appreciate about the medium.

Totally. Yeah, it's, it's pretty interesting. It's, it's definitely growing. I saw one thing that, that one thing that's interesting about the US versus China is that in the US Podcasting, it's all kind of free and given away, advertising driven. But in Asia, it's like a $4 billion mark where people actually pay to subscribe. And they're talking about some of the venture community out here saying, hey, we think in the future it's going to look more like Asia. There's going to be premium channels for podcasts and it's going to be a much bigger industry. It's going to change pretty dramatically over the next few years. So we'll see.

Wow.

What happens?

We will see. I'll look for you on A Bite of Man.

No, I think, I think we'll be looking for you. Okay, well, look, we'll wrap this up. Any questions for me before we get off?

No. Thank you so much for having me on the show. I've really had a lot of fun.

Yeah, no, Jonathan, it's been great. So I'll close this up. So thanks, Jonathan, for being on our show. Thanks, Dotto Robison for being our sound engineer. Anyone listening? Thanks for listening. Hopefully you found this useful. Our goal at New Retirement is to help anyone plan and manage their retirement so they can make the most of their money and time. And if you made it this far, I definitely encourage you to check out the Choose Fi website and the podcast and their YouTube channel and other ways of getting to know their content and what they're doing and their message. And on our side, if you want to join our Facebook group or follow us on Twitter, we'll be out there. And the last thing is for both of us, if you like what you're listening to, any reviews of our podcasts are definitely super helpful. Okay, thanks again and have a great day.