Brandon, financial independence expert, shares his origin story and discusses strategies for early retirement. Topics include: tax optimization, Roth IRA conversion ladder, college choices, car mistakes, learning from investment mistakes, and favorite blogs.
Financial independence is not just about reaching a number, but about finding a healthy balance between saving and living life to the fullest.
Automating investing and detaching emotionally from market fluctuations can help avoid missing out on potential gains.
Prioritizing experiences and reassessing goals and purpose are important aspects of post-financial independence life.
Deep dives
Psychological Evolution: From Deprivation to Freedom
Brandon shares his journey from a period of deprivation and hyper-focus on reaching financial independence, which ultimately led to feeling depressed. After realizing the need for change, he and his wife decided to sell their house and move back to be closer to friends and family. When unexpected work opportunities came up, Brandon decided to continue working remotely for a few more years. During this time, he and his wife embraced a more relaxed approach to spending, allowing themselves to enjoy experiences and not worry about money. This transition helped Brandon understand that financial independence is not just about reaching a number, but about finding a healthy balance between saving and living life to the fullest.
A Lesson in Market Timing
Brandon admits his struggle with market timing and how it has affected his investment decisions. Despite having a well-structured plan and automating his retirement accounts, his taxable account often remains with excess cash due to his hesitation to invest when market conditions are not ideal. He acknowledges the need to detach emotionally from market fluctuations and automate investing to avoid missing out on potential gains.
Optimized Investing and Shunning Complexity
Brandon primarily invests in index funds, including total stock market and international stock market index funds. He recognizes the importance of diversification and tax optimization within retirement accounts. Brandon has no investments in real estate or peer-to-peer lending platforms like Lending Club, which he views as risky and less liquid investments. He embraces simplicity in his investments, sticking to what he knows and focusing on long-term strategies.
Finding Contentment in Priorities and Experiences
Over time, Brandon has learned to shift his focus from material possessions to experiences and prioritizing what truly brings him happiness. He reflects on past periods of depriving himself in the pursuit of financial independence and feeling unfulfilled. Now, with a more balanced approach, he realizes that there is no need to constantly worry about money. He and his wife have found joy in embracing new opportunities, exploring their limits within the boundaries of financial independence, and living life without the burden of excessive frugality.
Transitioning to Post-FI Life and Unexpected Benefits
One of the main focuses after achieving financial independence is figuring out what comes next. The speaker discusses their personal transition and how they are documenting their experiences and insights. They emphasize the importance of preparing for life after financial independence and acknowledge the unexpected challenges and opportunities that arise. One of the surprising benefits mentioned is the freedom to have endless possibilities and experiences without the constraints of work. The speaker shares their own experience of waking up on the first Monday after a long trip and realizing that they have total freedom and unlimited possibilities. This sense of freedom and the ability to pursue passions and creative projects is highlighted as a major positive aspect of post-FI life.
The Importance of Figuring out What Makes You Happy
The speaker reflects on the importance of determining what truly brings happiness and contentment in life. They mention that as someone who achieves financial independence, it becomes essential to reassess one's goals and purpose. They explain that most people don't face these deep existential questions until much later in life, but with financial independence, these questions arise earlier. The speaker emphasizes the importance of constantly assessing and evolving what makes you happy, as wants and priorities change over time. They highlight the significance of starting projects and ideas rather than overanalyzing and talking oneself out of them. The advice to their younger self is to simply start and figure things out as they go, as unique ideas and opportunities often arise during the process.
017 | In Today’s Podcast we cover: Today’s guest: Brandon from MadFientist.com and the origin story of the Mad Fientist How did the Mad Fientist website come about? He first stumbled on the Early Retirement Extreme website He thought there’d be investing strategies to get him to financial independence more quickly, but he realized index funds were the best way to go about it Then he stumbled upon tax optimization and tax avoidance strategies Finding Get Rich Slowly and other personal finance blogs got him interested, but he looked at it through the eyes of an early retiree and realized the standard advice didn’t necessarily apply “Early retirees are such a different breed” and optimizations can be had when looking at the problems differently for FIRE He took a core tax strategy and pivoted it to the best way to optimize for early retirees
He uses his audience feedback to help come up with ideas for new posts or as ways to update and augment posts The Roth IRA conversion ladder changed the entire game for him and made him max out as many pre-tax accounts as possible How to get retirement money out earlier than the traditional 59.5 age without a penalty? Building a 5-year conversion ladder with traditional savings to cut your effective tax rate down to almost 0% on your traditional IRA and 401k Brandon’s college choice and how it impacted his financial life with minimal student loan debt Brandon took a software developer’s position at an Ivy League University and worked towards a free Ivy League master’s degree
Did Brandon max out his 401k his very first year? What’s the most expensive car Brandon every bought? He leased a Toyota RAV4 but other than that every car he has ever owned is at least 10 years old What financial mistakes has Brandon made or where does he not follow his own advice?
Timing the market and sitting with too much cash Take your brain out of your investing decisions once your plan is set What type of investing does Brandon do? All index funds from Vanguard and cash How has Brandon evolved psychologically as he has approached Financial Independence? Reaching your FI number doesn’t by definition make you happier. You have to find your passion in life They actually loosened up their spending for a year to enjoy life as much as possible.
Total tally: $35,000 of yearly spending. As compared to their normal $30,000 - $33,000 spending. An insignificant increase in money spent for such a large increase in satisfaction What is the most surprisingly positive aspect of post-FI life?
What does his life look like 5 years from now/what does he want to do with his life? Hot Seat Questions Favorite life hack: Find out what makes you happy Advice to your younger self: Just get started today
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