032R | The Checkpoints of FI

14 snips

Jul 21, 2017

Dive into the fascinating world of financial independence as the hosts discuss the milestones that mark your journey. Discover the significance of achieving a $100K net worth and how 'FU Money' factors into your financial strategy. They explore the emotional impact of the crossover point, where investment returns surpass earned income. Learn about gamifying your financial journey with checkpoints for added motivation. Plus, actionable hacks to save money on essential services and insights into the ever-important debate between paying off your mortgage or investing.

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INSIGHT

When Your FI Clock Starts

The "financial freedom clock" starts once you have positive net worth and all consumer (junk) debt is gone.
Exceptions like mortgages or student loans can have asterisked, math-based rules rather than blanket bans.

ADVICE

Use Concrete Milestones

Use concrete, tangible milestones to mark progress, like a $100k net worth or hitting your personal FU-money target.
Choose which milestones matter to you and check them off to maintain momentum and focus.

INSIGHT

FU Money Is Psychological

FU money is psychological as much as numerical; one to two years of expenses offers negotiation power and mental freedom.
The FU threshold can vary by person, so define the duration that gives you leverage and peace of mind.

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032R | In today's Friday Roundup we discuss Episode 32 with Joel from FI 180 on the 'Milestones of FI', plus a life hack voicemail from Noah and Frugal Wins of the Week from our Facebook community.

In Today’s Podcast we cover: The Friday Roundup after the Milestones of FI episode with Joel from FI 180 We’re having a FI get together in Richmond and hope to expand beyond Richmond

The gamification aspect of personal finance and the milestones When your ‘financial freedom clock’ starts and discussion of where certain types of debt plays into the calculation Financial freedom clock equals positive net worth and all junk debt is paid off Milestone two is when you have a $100,000 net worth (when Personal Capital starts calling you for a personal consultation)

The next milestone is ‘FU Money’ and there is discussion on where this fits into the continuum as the concept is nebulous

Should there be a milestone before $100k net worth and FU money? Adding in ‘checkpoints’ along the way on the journey to FI in addition to milestones Milestone four is ‘Half FI’ which means you have 12.5x your annual expenses saved up

Milestone five is ‘Lean FI’ which means you have enough to cover all your core expenses for life (not including your discretionary expenses) The discussion surrounding the math and psychology of paying off your mortgage or not paying it off The next milestone is the “crossover point” where your investments earned more than you did from working in a given month

The many catchphrases of Brad and Jonathan Milestone 7 is Flex FI, followed by Financial Independence as Milestone 8 and Milestone 9 is Fat FI The power of the concept of Flex FI and how you have an 82% chance of succeeding even at this milestone

The conversation surrounding where Brad is on the path to Financial Independence and where the side hustle factors into the calculation Our ask that the community helps us refine the milestones and checkpoints

How Joel’s FI journey and drawdown strategies can be a case study going forward Voicemail from Noah from Money Metagame on hacks to save on utilities

Take action and make the calls to compare prices on auto insurance, utilities, etc. Frugal win of the week from Michelle about unclaimed property Frugal win of the week from Vicki about Magical Iced Coffee Input from Don and Scott about buying cards and gift giving

Focus on our discussion about gift giving from a prior episode and the Five Love Languages