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Reflecting on their journey, the hosts delve into the evolving challenges of healthcare pricing and the potential solutions of price transparency. They share personal anecdotes about unexpected medical bills and tools like MDsave and GoodRX that offer savings. The importance of emergency funds is also discussed, balancing personal comfort with investment strategies amid economic uncertainty. Furthermore, they explore the role of cryptocurrencies and precious metals as alternative stores of value, advocating for a diversified approach to financial security.

Amanda Holden's approach to educating others includes laughter and shenanigans to democratize information and get it to stick. Amanda worked in corporate America at an investment management firm, but helping rich men get richer wasn't her calling. She hated the job and decided to establish a set of rules that we allow her to quit in six months and go travel. She chose to supplement her bare-bones spending by living off the excess of others. That including asking for leftover uneaten lunches which earned her the nickname, Dumpster Dog. Pulling burritos out of the trash and drastically cutting her spending worked. Amanda's savings enabled her to leave the job she hated and travel for a year. Dumpster Doggy has now become her identity, showing others how they can make it work even if they don't have a lot. Being privileged enough to live in one of the wealthiest countries in the world also means that we take it for granted and are surrounded by vast amounts of waste. Are we throwing so much away that we are sabotaging our chance to get what we really want? While each day she felt like she was trying just keep putting one foot in front of the other, at the time, she didn't think of it the changes she was making to leave a toxic work environment as a metamorphosis. She hated the job so much that she felt like the only option was to quit and start over from zero. Hating it that much allowed her to take a risk on doing something that aligned better with who she wanted to be and what she wanted to do. Her advice to anyone who doesn't dislike what they are doing quite as much as she did is to start saving and doing what they want to do on the side. Then assess once there is momentum to decide if you want to take it further. Amanda acknowledges that she was privileged with a level of comfort and security when taking her leap as she had a family to fall back on for help if needed. She isn't trying to sell entrepreneurship to everyone. It makes sense for some people but there are aspects of it that she doesn't love. It won't be the right fit for everybody. What worked for Amanda was starting by giving her service away for free and collecting as much feedback as she could. While she has the blog, For her business, she started out cold calling on sororities. She asked to come in to teach them about investing and then collecting their feedback. After building this foundation, she began to explore what the sticking points were for people and how she could begin to charge for her services. Amanda says it's all about connections, so utilize your network to get your information into the hands of whoever can help get you in the door. Amanda wants women to be in the conversation because when they have a seat at the table, they have wealth and the world is a better place. To reach women and make the material accessible, Amanda avoids jargon and uses comedy as an educational tool. For instance, she leads with equating a 401K or a Roth IRA with a Caboodle, which is just a fancy place for you to store your treasures. Amanda also uses a shame-free approach to money. Women are constantly feeling shamed about money, whether it's for making too much or too little, or for how they choose to spend it. She trusts you to be grown up enough to make spending decisions for yourself. Everyone deserves to be able to spend a little bit of money on themselves and have some fun. Living paycheck to paycheck might be a problem of spending too much or it might be not earning enough. Saving and investing can be automated if spending is the problem, while a conversation about earning might be warranted if income is the problem. In addition to removing the shame associated with money, Amanda says you don't have to be perfect. She uses her own mistake stories to help bring people in. While building her business, Amanda worked as a bartender and freelance writer. She still freelances for the regular income but she also puts on personal events that are more fun than the corporate speaking events where she feels muzzled. Amanda was teaching investing courses on Zoom well before Zoom became a thing. She's been able to scale the course by putting it on video. The first thing she tells people is that investing is absolutely in their capacity and that if you take a set it and forget it approach, you'll probably do better than the investing experts. Course information can be found on her Instagram page. If interested in contacting her for a speaking event, reach out to her on Instagram or by email. Website: Invested Development Website: The Dumpster Dog Blog Instagram: Dumpster.doggy Email: AmandaHoldenInvesting@gmail.com Resources Mentioned In Today's Conversation Start your 60-day free trial with LinkedIn Sales Navigator today. Switch to Mint Mobile and save. Get started on your own journey to financial independence at ChooseFI.com/start. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

Wondering what happened with GameStop and confused about what a short squeeze is? The complexity of this kind of trading is far from the simple strategy of buy and hold investing. Even for those who have no plans to jump on bandwagon, it's good to understand exactly what is going on. We can learn what's happening, how it works, and move intelligently forward. In an effort to understand systems, Brad has been having a maddening healthcare experience. He needs a CT scan but hasn't been able to find out what the base cost will be. The negotiated cost won't be known until after the procedure so Brad won't know how much it will cost him until then. At a macro level, the stock market has had a fairly smooth move up and to the right for the past 10 years or so. For investors, it's been somewhat predictable, at least until this last week when GameStop stock began to skyrocket. There are aspects of the stock market the average investor doesn't see. Hedge funds are participating with huge amounts of money in layers that are essentially hidden to the masses, until it wasn't, and they got caught unaware. Brian Feroldi says the last few weeks have been some of the weirdest in the investing world that he's ever seen. The story has infiltrated mainstream culture and he's been getting questions from all over about what is going on. Even his mom sent a text asking about GameStop. First, GameStop is a physical seller of video games. As video games became popular, GameStop was a great investment, however, once people began downloading video games, its business prospects declined. As a result, GameStop stock prices have also been declining for many years and it is believed they will cease to exist as a business in a couple of years. Investors or many managers can make money when a stock declines in what's called shorting the stock. A short sale stock is the opposite of becoming a buy and hold investor in a stock. A short sale works by going to your broker predicting a stock's decline and state you want to short that stock at a particular price. The broker goes and borrows shares of the stock from another investor for the price you stated and you collect the proceeds from the sale. Your goal is to then buy those shares back at a later date for a lower price and return them to the original investor. The original owner of the stock makes money by receiving a small fee from the person borrowing their stock, almost like being charged an interest rate. The more demand there is to short a stock, the higher the fees. There is no set timeframe when shorting a stock. I can be shorted indefinitely. However, if the owner of the stock wants to sell it, the broker who borrowed the stock would have to go and find another short for you to borrow from. If they cannot find other shares to short, the transaction would need to be undone on the short side at current market rates. Most of us take long positions on stocks, believing the stock is going to increase in value. Allowing someone else to borrow your stock in a short position is another way to make money on owning it. Some brokers like Brian's are interactive and sent him an email asking if he would be interested in allowing his stock to be borrowed or shorted. since he's interested in holding the stocks for a long period of time, he said yes. Shorting a stock does put downward pressure on the share price. Individual investors don't have much influence, but a hedge fund taking a significant position to short a stock can drive prices down. The market price of a stock at any given time is simultaneously the lowest price buyers are willing to pay and the highest price sellers are willing to sell at. Shorts are happening all of the time, so how did GameStop land on the radar of the subreddit group, Wallstreetbets? In the case of GameStop, there were more shares sold short than there were publicly traded, which is something that very rarely happens. Wallstreetbets took the opposite position, stating that GameStop's fundamentals were different from companies like Blockbuster, and its stock price was actually undervalued. An article by Andrew Left from Citron Research predicting GameStop stock going down hard caught the attention of Wallstreetbets. Its members rallied together to buy GameStop stock. It was then that GameStop stock began to rise. Someone with a short position on a stock does not want to see the price rise. Rising GameStop prices kicked off what's called a short squeeze. There's no logical argument for saying that GameStop stock was worth $4 in December and $400 just three weeks later. What shifted was who was controlling the mechanics of the system. The members of Wallstreetbets understood that due to the large number of short positions on GameStop, if enough of them got together to buy it, they could force those in short positions to buy back into it. GameStop was priced for bankruptcy. While there's no limit to how high a stock can go, the lowest it can go is $0. In that case, the short seller earns a 100% return on their money. However, when a stock rises, being short on a stock can cost significantly more than you put into the stock. To get out of a short means you have to buy the stock. The buying demand placed on the stock increases the share price. When all of the short sellers saw GameStop's stock price rise, they had to try and get out by undoing the trade by buying the stock themselves, putting more upward pressure on the stock price and on other short-sellers who wanted to undo the trade. That's why GameStop stock prices rose so dramatically in such a short period of time. Short squeezes are not a new phenomenon. In the past, other heavily shorted companies have come out with good news and saw their stock prices skyrocket. What makes the GameStop situation unique is that it resulted from a coordinated group of buyers banded together to make it happen. In this short squeeze, there was additional controversy surrounding Robinhood, the zero-commission broker. Because Robinhood doesn't make money on trades, they make money by selling your trading information to high-frequency traders who can make money with micro-transactions. It's those traders who are the real customers of Robinhood. When GameStop and other heavily shorted stock prices began to rise, Robinhood's hedge fund customers began to lose a lot of money so Robinhood decided to stop trading with these stocks to give the hedge funds time to undo their trades. Meanwhile, Robinhood's small investors were not allowed to buy and sell. Robinhood aggregates and sells client trade information to the high-frequency traders who can buy the stocks then turn around and sell it to the Robinhood client seconds later for a little extra money. Robinhood's business model probably works out for a buy and hold investor at the micro-level, but the GameStop situation highlights what can go wrong when each other's incentives are not aligned. What this demonstrates is that the game is stacked against an individual investor trying to enter and exit the markets with precision. But for the buy and hold investor, this has been mostly noise. To summarize what happened this week, Brian quoted Morgan Housel who recently tweeted, "The GameStop thing is a reminder that investing is not the study of finance. It's the study of how people behave with money. And sometimes those behaviors are incredible." Brian says there has been a huge rise in demand for Environmental, Social, and Government (ESG) funds. The exact definition of what ESG investing means varies from person to person so read through the fund to ensure it meets your definition. There are a lot of ESG funds to choose from now and fees have gone down, especially since Vanguard now has an ESG fund. If you listened to Monday's episode on M1 Finance, M1 does not sell mutual funds, they sell ETFs. The ETF version of VTSAX is VTI. Resources Mentioned In Today's Conversation The Big Short: Inside the Doomsday Time Machine by Micael Lewis Flash Boys: A Wall Street Revolt by Michael Lewis Learn more about M1 Finance at ChooseFI.com/M1 If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

M1 Finance transformed Jonathan's ideas about how simple complexity could be and has quickly become his favorite investing platform, especially for taxable accounts. Brian Barnes investing story begins at the age of 10 when his parents exposed him to trading stock in a brokerage account with Ameritrade. He was captivated by the notion of investing and the intellectual puzzle of how a company was doing. His parents laid a general foundation of financial independence and security. Once basics were covered, they placed value on putting money someplace where it could accrue value, compound, and become ownership is something valuable. Getting started at the tail end of the Dot Com bust, it was a great time to be buying when prices were low and companies were valued cheaply. Brian says there is a big difference between traders and investors. Traders speculate on price and try to make money on short-term movements. Investors buy ownership in companies, asset classes, or industries to accrue value over long periods of time. When you aren't making frequent investment decisions, it becomes more about viewing your portfolio in totality and making a decision on what to do with the extra money you have leftover from your paycheck. In the trading world, you have to go in and make the same decisions to buy the same securities over and over again, but with M1, you can make the decision once and let the software automate the process. With day trading, you can't just be right once, you need to be right over and over and over again, constantly timing the market perfectly. It's difficult to predict costs even when commissions are free and it's tax-inefficient. With an investing mindset, you want to own over long periods to accrue value and generate cash flows. At the age of 25, Brian realized investing platforms hadn't changed in 15 years. He looked at consumer applications work that sought to make things simpler, more intuitive, and automated wondering why there hadn't been progress in the financial services world. He thought it would be nice if he could tell a software platform the portfolio he wanted to own, and anytime he had money, he could throw it into the platform and it just went to work. He wanted to deploy all of the money by purchasing fractional shares so there wasn't any cash drag. And finally, incredibly low fees with no commissions. As M1 has expanded, it's grown from his "wouldn't it be nice" idea to other areas like borrowing and spending, allowing users to have one financial institution instead of needing to use multiple apps. M1's philosophy is that a great product allows you to do complex things simply. What they allow customers to do is determine what share of their portfolio they want in any given investment and then the software handles the complex and mundane administrative work. It used to be that you had to buy lots of 100 shares. It was a big step forward to be able to purchase odd lots of shares. Being able to purchase fractional shares with M1 is transformational. They do this by purchasing in whole shares and adding the leftover fractions to their own inventory account. It makes it easier for the customer to deploy more money consistently and have a diversified portfolio. M1 is a commission-free platform. Traditional brokerages made 10-35% of their money from commissions. Through technology development, the cost to trade is only an electronic message. Though not free, on a per-transaction basis, it can be no-cost to the user. M1 can make money monetizing the assets held on their platform so by being efficient, they don't need to charge transaction fees, making it a win-win arrangement. M1 is not good for day traders. It's suited for systematic investing in the portfolio of your choosing. Their trade windows occur twice a day and aggregate all orders on behalf of their customers once in the morning and once in the afternoon. While you can invest money every day through M1, a good financial habit to establish is to invest the extra cash you have leftover from your paycheck every two weeks. M1 allows for that to be automated. Portfolio management in M1 orients itself around a pie concept. At the highest level, the pie is 100% of your portfolio. You can then begin to divide up the pie into slices based on what percentage of your portfolio you want in specific investments. The slices can then become their own pies. It allows for a diversified portfolio, controlling risk exposure, without the risk of becoming overconcentrated. In M1 you can rebalance your portfolio in the next trading window with the one-click button although that method is tax-inefficient. Instead, additional contributions will automatically work to rebalance your portfolio with your pies without causing taxable events. With investing, taxes are going to be your biggest fees. Minimizing taxes controls costs and maximizes long-term success. With M1's dynamic rebalancing, it tries to minimize the sale of securities with tax consequences to push taxes out as far as possible and let your money have more time to compound. Brian is a fan of Vanguard and what they have to prioritize the individual investor. The difference between M1 and Vanguard is that you can buy Vanguard ETFs with M1, but Vanguard has a mediocre brokerage to buy other securities. Compared to Vanguard, M1 offers a more robust and comprehensive personal financial platform, such as a line of credit against your securities with rates as low as 2%. M1 also has a high-yield checking account earning 1% plus 1% on debit card purchases. The smart transfer tool allows you to set parameters and have money automatically move in and out of accounts accordingly. M1 wants to be a personal finance platform where you can manage your money holistically. They just launched custodial accounts which are available with the M1 Plus membership for $125 a year which has additional benefits across Invest, Borrow, and Spend. M1 is offering a promotion to get one year of M1 Plus for free. In the last few weeks, ChooseFI CEO Ed has been migrating assets from other platforms to M1. While Brad already has an M1 account, this conversation with Brian has helped him realize what he has been missing out on. Jonathan wanted to note that with the smart transfer rules, the decumulation phase can now be as easy as the accumulation phase. Previously, Jonathan was going to get a HELOC. When he stumbled upon M1 Borrow, he realized that it was a margin loan much in the same way that a HELOC is a loan against your home. Borrow can be a liquidity tool, giving you access to 30% of your investments as an emergency fund. It gives you an incentive to build an emergency fund and keep it invested. Brian says you should be able to have a line of credit against a liquid investment portfolio at really low-interest rates. The goal for M1 Finance as the finance super app is for people to come to M1 to manage their finances, not a component of their money, as well as provide the same level of capability that a high-price team optimizing every aspect of your finances could in a self-serve product. You won't find VTSAX on M1. VTSAX is a mutual fund and M1 does not have mutual funds. What it does have are ETFs which are identical versions of mutual funds. VTI is the ETF version of VTSAX on the M1 platform. M1 also has Paul Merriman pies for anyone interested in his ultimate buy and hold portfolio. For those in the decumulation phase, M1 has IRAs, taxable accounts, and 401Ks that may be rollover into IRAs which can be set up as smart accounts using dynamic rebalancing and withdraw money in the most tax-efficient manner possible. Resources Mentioned In Today's Conversation M1 Finance-Completely Free Automated Investing! If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

After four years of working on the ChooseFI podcast, Brad and Jonathan want to share their lessons learned, the list of things they might do differently, and highlight a few episodes to re-listen to. Brad is back in the studio after missing out on Episode 290 with Paul Merriman. He's doing fine and appreciates everyone's concern. With Paul Merriman's Ultimate Buy and Hold Portfolio strategy, the thesis is that diversity is great, but own equal amounts of all asset classes versus a cap-weighted index fund to capture the growth potential of small companies. Unfortunately, for the last 12 years, the majority of growth has come from large companies. Brad says Paul's book reads like a FI manual with a high-level overview of small steps that could be million-dollar decisions. The decisions are not little. As discussed in Brad's The FI Weekly email this week, the Rule of 72 states how long it will take you money to double at a given rate of return. 72 divided by the rate of return is how many years before the money doubles. For example, 72 divided by 8% equals 9 years to double your money. The impact of that last double can be worth millions, that's why getting started early is critical. If your new and haven't already, today is the day to start. Jonathan agrees Paul's book is a great FI primer and was surprised by how much he enjoyed reading it. He says it would make a great gift. ChooseFI often talks about the aggregation of marginal gains. It can be quantified as each half a percent improvement means we can make an extra million dollars. Come up with 10 and that's an extra $10 million over your investing lifetime. If you can't do all 10, pick three or four and implement early, aggressively, and consistently. If they could turn back time and look at how their own understanding has grown and developed over the last four years, what would the conversation look like from both micro and macro views? Starting with investing, in the beginning, the most powerful concept inspired by JL Collins was to avoid the fees, a sentiment echoed by Paul Merriman as well. Diversity and time in the market are also key. You will lose approximately 40% of your total net worth when invested with a financial advisor at 1% in a mutual fund with a 1% expense ratio. The dramatic loss happens when your gross 8% market return is reduced to just 6% after fees. In Episode 052 with Todd Tresidder, he highlighted that there are three asset classes you could invest in, paper, like the stock market, entrepreneurship, such as starting your own business, or real estate. Inside of paper assets like the stock market, Todd says complexity can be valuable, but others like Big Ern and Rick Ferry say most people will do far betting sticking with something simple they understand. It's important to talk about the things that will increase the likelihood of success then discuss nuance. While Brad craves simplicity, Jonathan enjoys learning more. There's no one right answer, only what works for you. Jonathan always conflated individual stock purchases with day trading, but episodes with Brian Feroldi helped him realize they are not the same. For Brad, individual stocks always seemed like gambling. While he doesn't advocate having a huge percentage of your net worth in individual stocks, it's no longer the 0% he would have advocated for years ago. The software available through M1 Finance allows Jonathan to implement the complexity associated with some of these strategies and maintain them simply. As for investing in entrepreneurship, it has become something Jonathan loves doing. It's an investment he has total control over, as discussed in episodes with Alan Donegan after he pointed out entrepreneurship was left off the Pillars of FI list. After a disastrous real estate failure in his 20s, Brad learned real estate investing can be a significant part of his portfolio if you are investing and not merely speculating. He now owns two single-family rental properties which have been successful so far. When you decide to start adding complexity, the price that's paid is usually time. Jonathan believes we are all stuck in a system, but the FI community is working to break out of the system in the best possible way to bring control back over their lives. Following the path to FI by saving money gives you options, power, and agency. In every aspect of life, look at the rules of the game, survey the field, and make the best decision that's going to work for you. Skills are more valuable than degrees. Upcoming in a future episode is Anita, who recently graduated from the Talent Stacker program. Coming from the hospitality industry, she had a four-year degree that left her with massive debt. After two to three months of training in a new industry for just a couple thousand dollars, she's now making multiples of what she was before. The best way to learn something is to do it. If we can build a system around that, we can eliminate the need to wait four to eight years and go into debt. That's what Jonathan and Bradley Rice did with their course. An 18-year-old who skips college, takes the course, and comes out making 60-80 thousand dollars a year can be Coast FI at age 25. with Coast FI where you have enough saved and invested and will never need to save another dollar again and have a net worth more than other at traditional retirement age. M1 Finance's Plus feature normally costs $125/year, but right now you can get the first year for free. With M1 Plus you get a 1% yield on online checking and they will reduce your M1 borrow rate. Jonathan doesn't have a HELOC because a margin loan from his M1 investments is so powerful. M1 introduced a new feature called a smart transfer. ChooseFI's CEO, Ed, has been testing it out. The current borrowing rate is 1.5% less for someone with M1 Plus. Because Ed is retired, he hasn't been able to refinance his home at the historic low rates. Instead, he did hi sown refi with M1 Borrow. Although Ed came to M1 to hack his mortgage, he decided to stay for the checking yield. Then he found the smart transfer tool. Similar to Zapier, smart transfer allows you to create rules to manage your finances. With simple rules-based drag and drop programming, you can always have enough in your M1 Spend account to earn the most yield, pay all your bills, and be optimally invested in the market. Resources Mentioned In Today's Conversation We're Talking Millions!: 12 Simple Ways to Supercharge Your Retirement by Paul Merriman ChooseFI Episode 284 JL Collins ChooseFI Episode 052 FIRE State of the Union with Todd Tresidder ChooseFI Episode 075 The Unfair Advantages of the Individual Investor with Brian Feroldi ChooseFI Episode 200 Stock Fundamentals with Brian Feroldi ChooseFI Episode 021 The Pillars of FI ChooseFI Episode 117 Making the Case for Part-Time with Bradley Rice ChooseFI Episode 239 The Gatekeepers are Gone Get Jonathan and Bradley's free five-day email course at ChooseFI.com/salesforce M1 Finance Review If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

Does your portfolio own enough of the companies that carry a lot of the growth over extended periods of time? When you buy index funds, you aren't as diversified as you think you are. Cap weighted index funds mean you are buying a lot of the companies that are doing really well. But there are two asset classes Paul Merriman is a fan of that he thinks don't get enough attention, small cap and value. Although many people claim to believe in a buy and hold strategy with investing, their behavior says otherwise. They like to buy when things are hot because they believe it's going to keep going up. If you look back as far as 1928, a lot of the time the S&P 500 is walloping small cap value returns, yet at the end of this 92 year period, small cap value made 24 times the amount of money the S&P 500 did. Even though there are long periods of underperformance, when small cap value does take off, there is outstanding performance. Then when it reverts back to the mean, there is a higher compound rate of return. Owning a large cap fund means each holding in that portfolio, and how much of the portfolio it represents is based on how large that company is. The big companies represent 80-85% of the corporate public value in our economy. However, history shows that the smaller companies and the value companies produce a better rate of return because they are more risky. It doesn't have to be a lot to make a big difference. If you were put 10% in a small cap value fund, it would give you a legitimate shot at having 20-30% more money when you retire. The top 20 companies probably make up 20-30% of the money you have invested. Investing in an S&P 500 or total stock market fund provides an illusion of diversity. As companies get to be bigger in size, it becomes increasingly more difficult to double or triple in size. Companies are valued by the number of shares times the price in the market. Large cap index fund companies average a market capitalization value from $50 billion to $150 billion. Small cap companies are roughly 1/50th the size of the big companies with values averaging $2 billion. They are legitimate companies, but many of them will fail. Since 1928, the S&P 500 or total stock market compound rate of return has averaged 10%. However, research has shown that only 4% of those public companies made virtually all of that 10%, while 96% of companies averaged just 3%. As an aggregate, small companies are much more likely to double or triple in size. Value companies can be seen as companies that are out of favor and years later, they may still be out of favor. Academics don't advise buying value companies one at a time. People come into value companies to make them more meaningful, profitable, and efficient turning those companies around. The problem with great companies with a great future is that when something happens to pop the ballon, those companies can fall 25% in a day, similar to what happened with the Dot-com bubble in 2000. Telsa, for instance, is a car company on the verge of bankruptcy several years ago and now it's up 400% even though it is barely turning a profit. With a current share price of $800, it's going to take a lot to double your money, yet people still believe in Tesla. Paul wants to help people figure out how to invest in an unemotional way and don't get caught up believing in something that isn't likely to happen. Last year, growth companies were up 35-40%, however, looking back at 90 years of evidence, growth produced a lower rate of return than value by 2% a year. Paul's latest book, We're Talking Millions!, is all about the extra half of 1%. For every half of 1% you can make on your portfolio over a lifetime, you add a million dollars. Finding more of those half of 1% and adding them up is a lot sexier than finding the hottest thing in the market. In his book, Paul lays out 12 simple ways to capture those half 1% that the market is ignoring. Paul's been hearing complaints for years that his work has been too complex. It's was something his firm did for his clients, but most individuals do not want to make it that complex. Someone in their twenties, investing just $5,000 a year for 40 years, can use these strategies to make millions over an investing lifetime. It's not all because you took more risk, it's also how you protect your money from others getting their hands on it, like money managers. Choosing to save can be a million decision, and choosing to save early can be another million. In one mind-blowing statistic, Paul says 25% of millennials will not put money in the stock market. The ultimate buy and hold portfolio might be difficult to replicate inside a 401K. To make things more simplified, Chris Pedersen developed a system to implement the philosophy with roughly 98% of the benefits. The goal is to keep it as simple as possible so that anyone can do it and won't need to manage it other than for a few minutes a year. One way to buy a target date fund. But because they don't have enough value or small cap companies represented, have 90% of contributions go to the target date fund and 10% to a small cap value fund. The target date fund is broadly diversified and automatically adjusts to become more conservative as you age. Chris said the problem is young people should have more invested in small cap value and came up with a formula for calculating just how much, which is 1.5 times your age into a target fund and the remainder in small cap value. For example, a 30-year-old should multiply 30 years x 1.5 to get 45% in a target date fund and 55% in small cap value. Paul and Chris encourage continuing to hold 10% in small cap value at the age of 60 and beyond which is good during the 30 or more years in retirement. Not all target date funds are created equal. Look for one that is low cost and contains total stock market funds. Jonathan doesn't like having bonds in his portfolio and notes that target date funds have bonds in them. Paul agrees and said he spoke with John Bogle about it once. He was told that bonds are defensive and do good when the rest of the portfolio is down 50%. You can reduce your exposure to bonds in target date funds by adding equities to your portfolio. With target date funds, the year indicates how aggressive it is. As with a traditional portfolio, rebalancing your portfolio is a part of the small cap value strategy. If you want to be true to your strategy, you need to sell some winners and buy some of the losers. Jonathan has modeled one of the Ultimate Buy and Hold Portfolio pies Paul has on his website in his taxable brokerage account with M1. Paul says it's never been easier or efficient to invest. Even if the market does return as much as in the past, you can probably make the same return because it used to cost so much to do before. They are coming out with all new recommendations for best-in-class ETFs. Paul has all his buy and hold funds in DFA dimensional funds and now anyone will be able to buy DFA funds through DFA or Avantis without paying a commission. Since it's an ETF, you can buy commission-free with M1. Pauls' book is free for teachers and students, just email Paul at Paul@paulmerriman.com to get the PDF by email. The book is also available on Amazon. If you can't afford the $14.95 price tag, email Paul for the PDF. Resources Mentioned In Today's Conversation ChooseFI Episode 130 Paul Merriman Introduces the Ultimate Buy and Hold Portfolio We're Talking Millions!: 12 Simple Ways to Supercharge Your Retirement by Paul Merriman M1 Finance Review – Completely Free Automated Investing! If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

For almost 12 months, we've all been trying to do the best that we can. As frequently discussed on the show, we try to do things slightly different, optimize in the ways that we can, and make the best of the situation. Jonathan's wife Dani has been coming up with all kinds of creative little activities for the kids. Even Jonathan was recruited for a rock painting project. Brad has been listening to a new podcast, Ordinary Sherpa, created by Heidi, a member of Jonathan's Talent Stacker podcast. The podcast is about creating little adventures in life with your family. At the same time, in the mastermind group Brad takes part in, he was inspired by a discussion related to dads really showing up to be a part of their kids' lives. The podcast theme and mastermind group discussion converged for Brad when his daughter, Molly, asked him to go explore the creek with her. Rather than playing along for a minimally acceptable amount of time, Brad showed up like he really wanted to be there and they had hours of fun exploring together. What if you started to show up for everything in your life with the attitude that you really wanted to be there? It's difficult to be focused on growth in all areas of your life at the same time. There are different seasons when you will be able to lean into one over another but it's good to figure out a baseline you're comfortable with and recognize when it's time to rebalance. Since Brad's financial life is on autopilot, it's not something he spends much time focusing on. However, sometimes things do backslide and he needs to return a little focus to it. Such as, he recently canceled two recurring charges for streaming services, not because their costs were going to have a significant impact, but because he was no longer getting value from them. Relationships is an area Brad believes he could spend more time focusing on. If he were to ask himself, "Am I showing up as the best version of myself for my wife and kids every day?" his answer would be "no". Who should be leaning into and leveraging their Roth 401K? Sean Mullaney, The FI Tax Guy, says the Roth 401K works similar to a 401K except the funds going in are taxable today and come out later tax and penalty-free. Those currently in a high tax bracket looking to retire early are probably better off contributing to a traditional 401K. But someone just out of college in a 10% federal tax bracket may benefit from paying 10% in taxes today rather than 20-30% later on. Even someone who may have substantial taxable income in retirement may benefit from a Roth 401K. A Roth 401K can also be a hedge against future tax rates for anyone who prefers to lock in their tax rate today. If your 401K plan offers it, you don't have to do all Roth 401K or traditional 401K. You can split the difference. For example, a 60-year-old new retiree with a large 401K will be taxed on every dollar withdrawn. We don't know what future tax rates will be. Roth 401K withdrawals don't work the same way as traditional 401K withdrawals. You can structure it in a way that you can recover tax-free contributions, From a Roth 401K, you may need to rollover into a Roth IRA. For the early retirees who don't plan to retire at a super early age or anyone with artificially low income for a few years, the Roth 401K is a strategy to consider. If you aren't 59 1/2 yet, Roth 401K withdrawals are subject to the cream in the coffee rule where 2/3 of the withdrawal is tax and penalty-free but 1/3 is subject to ordinary income tax and a penalty. This is different than a Roth IRA where contributions may be withdrawn at any age tax and penalty-free. When you roll over a Roth 401K to a Roth IRA, the Roth 401K contributions go in as Roth IRA contributions, and earnings become Roth IRA earnings. You could then take out the full amount of contributions tax and penalty-free before touching the earnings. If you aren't 59 1/2 and need to access your Roth 401 contributions, it makes sense to roll them over to a Roth IRA first. If you have employer stock in your 401K, there may be net unrealized appreciation. You do not want to roll it over from a traditional 401K to a traditional IRA without considering a tax planning strategy. This requires assistance from a tax professional. If you want to do a backdoor Roth IRA, rolling over 401K to a traditional IRA isn't a good idea. The fees associated with 401K plans have gotten better over the last 10-15 years. The investment choices are better with lower fees. It may not make sense to do a rollover. As a general rule, retirement accounts have required minimum distributions (RMDs) once you turn age 72. The exception is the Roth IRA. While RMDs from a Roth 401K are not taxable, you want to keep that money growing tax-free as long as possible for you and your heirs. If you're 72, Sean would recommend you roll your Roth 401K to a Roth IRA for that reason. Generally, you need a separation of service to do rollovers from a Roth 401K to a Roth IRA. Look for your plan's Summary Plan Description (SPD) which details withdrawals. 401K plans are subject to the ERISA law, where creditors cannot access the funds, except for ex-spouses and the IRS. IRA creditor protection varies from state to state. Something to consider before a rollover. Dani and the ChooseFI Foundation are using meal planning as a financial literacy tool. Always looking for ways to get children interested and thinking bout decision-making and personal finance, they have put together Meal Planning Made Easy. The meal planning project helps kids put financial literacy concepts into a real-world contest. The goal is to make financial literacy concepts more than just habits but to have kids take ownership and have fun doing it. In the 3rd through 5th-grade video series, Dani talks them through meal planning. They are tasked with going into a grocery store, either in-person or virtually, and planning all three meals for one day. The meal planning project is adaptable to fit every socioeconomic setting. The tasks grow as children develop. High school students may plan meals for an entire week, searching the pantry first, and finding recipes to help on the budgeting side of things, just like parents have to do. Sign up for Meal Planning Made Easy at Choosefi.com/mealplan. Resources Mentioned In Today's Conversation The FI Tax Guy Ordinary Sherpa Do Inner Work Roth 401K Withdrawals ChooseFI Foundation ChooseFI.com/mealplan Get started on your own journey to financial independence at ChooseFI.com/start. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

Should you rush to reach FI? Or use it as a map in a lifelong pursuit to master your relationship with time, money, and happiness? Brandon, from the Mad Fientist, wishes he would have found more free time to work on other goals while on his journey to FI. When Brandon was first on the show four years ago, he had just reached FI and discussed the psychological hurdles he had to overcome. What's changed for him since then, and with the benefit of hindsight, what would he do differently? Brandon's dream as a child was to write music and put it out in the world. However, his musical tastes are not mainstream, so becoming a pop star was never one of his ambitions. He did not want to just be a consumer, he wanted to be a creator and always felt that it was his job that was holding him back. It wasn't until after reaching FI that he realized it wasn't was what holding him back at all. He had been spending his free time on things like television on travel instead of his music project. His problem was psychological. As a math and science guy, he didn't believe he could do it. Trying meant the risk of failure, and if he failed, the dream would be gone. It took Brandon two years to come to grips with and get over that hurdle. During his pursuit of financial independence, Brandon has tunnel vision, with all his time and effort devoted to making and saving more so that he could reach FI more quickly. The result was a decrease in his overall happiness. He admits that he did it wrong. The whole point is to master the relationship between money, time, and happiness. Mastery is probably better to focus on over goals. Goals delay your happiness because you are always looking to the future instead of enjoying the present or the journey. Reaching FI for Brandon didn't have an impact on his life other than making him more confident that he could step away from his job. Motivating yourself to do something is hard when you don't have any sort of external motivation to do it. In 2017, Brandon wanted to do two things: get better at songwriting and get fit. The personal trainer he was working with asked him how much he wanted to bench press or how much muscle mass he wanted to put on. Those were goals Brandon didn't care about. With his mastery mindset, he only wanted to get healthy and stay healthy. In contrast to getting fit, his specific goal for songwriting was to write a song and share it with his brother. When he finished it, not only was it awful, but the whole process was awful and it caused him to quit pursuing any additional songwriting until he summoned up the courage again in 2019. Pursuing mastery may be summed up by asking, "Am I better today than I was yesterday?" Continuing to answer yes is pursuing mastery. Brandon found it to be true that doing something consistently changes who you are. He never felt like a musician until he was doing it for 25 hours a week. He still feels like his triangle is skewed toward money at the expense of time and happiness so he has been trying to figure out how to use money to get more time or increase happiness. For example, he wrote eight songs and wanted to get them to sound as great as possible, so he hired a Grammy award-winning sound mixing engineer to help mix his album. He was able to both learn and make a better final product. He doesn't want to waste money but does want to figure out how to use it efficiently and maximize the triangle of money, time, and happiness. There's a lot of unconscious spending in society that doesn't really bring happiness either. Getting on the path to FI helps you sort out the equation a bit more. We're terrible at knowing what will make us happy. That's where experimenting comes in. Experiment with your spending and your activities. What still feels good a week later versus ended up being meaningless. It's okay to spend money sometimes as long as you do it from a place of value. If you are in a deprivation zone, one thing that helped Brandon was to relax for two years with respect to his spending. If it was something he and his wife wanted to do, they did it. At the end of the year, although it felt like they had lived an extravagant life, they spend just $3,000 more than normal. In the deprivation zone, you are testing the lower limits. You can test the upper limits and then hopefully find the sweet spot. It's difficult to find where the sweet spot is for you without testing the limits. Once you have the bigs things taken care of, the little ones don't seem to matter. Brandon had already limited his large structural recurring expenses. What he had given himself latitude with were the everyday one-off decisions that in aggregate, turn out to barely move the needle of his finances. Brad and his family have anchored themselves to a $2 per person per meal per day rule. It helps them to apply intentionality to their meal planning. He thinks it's better to try and optimize and then dial it back if gets to be a little too much than continue to go through life being unaware. Brandon is an introvert, so announcing publicly that he is releasing his first album is a big deal. Back when he wasn't making progress because he wasn't putting the time in, he talked his brother into going to a park and playing a show. The thought of doing it was scary, but he already knew what it was like not to it. He wanted to know what the world would be like if he did do it. While playing in the park, a man slipped Brandon his email address. It turned out he source talent for a music festival in Scotland and asked if they wanted to play at it. Brandon taking that chance in the park reminded Brad of a quote by Scott Young, "Your deepest moments of happiness don't come from doing easy things. They come from realizing your potential and overcoming your limiting beliefs about yourself". Both financial independence and the pursuit of financial independence allow you to begin building armor. Failure is good. You have to be bad at something before you are good at it. FI definitely helped Brandon build his armor. He didn't have anyone to answer to or worry about stumbling across what he was doing. He also uses an alter ego for his work in the financial space, as well as another for his music. Something that Brand did to progress with his music was conduct an ultralearning experiment. He took three months where he blocked out all other activities competing for this attention to do the thing that he wanted to do, which was write songs. He committed to devoting 25 hours a week and built spreadsheets of prioritized tasks. He says it is the only reason he succeeded. He focused on the hours and the effort and then by-product comes out of it. For others just trying to get started learning, Brandon thinks copying what you love is a great place to start. Your unique set of influences is enough to make what you do unique. The unique skills each of them possess is what lead to this very podcast. Brad being a CPA with a travel rewards website is what got him a guest spot on Brandon's podcast. Then Jonathan heard the podcast and discovered both Brad and he lived in Richmond, which lead him to first contact Brad. Every good idea comes out of a bad idea, or an okay idea, or even a mediocre idea. You do not need to get it right the first time. The fact that you are willing to try gives you the opportunity to get feedback and iterate into something amazing. Brandon's album is available for just $5! You can pre-order your copy at ChooseFI.com/album. Resources Mentioned In Today's Conversation ChooseFI Episode 017 Mad Fientist and Origin Story James Clear "Forget About Setting Goals. Focus on This Instead." Ultralearning: Master Hard Skills, Outsmart the Competition, and Accelerate Your Career by Scott Young If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

Are you the kind of person who sets New Year's resolutions? Like many Americans, Jonathan used to set weight loss goals for the new year, but not this year. Instead, he and his accountability partner, JD Roth, spent the previous nine months working on it and began the year, at or very close to their goal weight. Not having to work on big weight loss goals is allowing Jonathan to be aware and focus on testing smaller adjustments that will make him feel better and have more energy. Brad once had an experience while on vacation that made him realize how his normal diet was causing him joint pain. He wasn't even aware he had joint pain until one day it was gone. It was only then that he understood he had a problem that needed to be worked on. When you live an examined life, you don't have to accept the things that are reducing your capacity to function as normal. Brad thought his morning smoothies were a healthy choice, but it turns out the negative impact was a sugar crash necessitating an afternoon nap. It wasn't something he noticed until he stopped the daily smoothie routine. The examined life concept can be applied to your personal finance life as well. It's not as much a goal as it is a mastery of process. Brad embraces James Clear's concept of setting up systems that work in his life versus setting goals. He has set up eight different things he wants to accomplish as a part of a system with checkpoints along the way. In an attempt to develop two new habits, Brad is habit stacking. With habit stacking, you take one habit you have and combine it with another you want to create. Brad has combined his desire to become more fluent in Japanese with moving more during the day by taking walks around the neighborhood while listening to the Pimsleur language learning app. It's not perfect, but it's a system that is working for him. Brad is also following the advice of Chris Guillebeau and conducting his own annual review. This annual review sets the big picture, the intentions, the purpose, and outcomes. It then breaks life down into different areas where concrete goals may be set, such as self, health, family, community, travel, and others. While neither has large plots of land in suburban Richmond, VA, Jonathan and Brad have both contemplated starting some sort of micro garden. Listener James wrote in to say that he's been able to cut down on his grocery bill by going a whole year eating only vegetables he's grown himself. James says knowledge isn't needed. Just try growing things. You'll learn as you go. Also, grow what you are actually going to eat. Kale is great, but not if you won't eat it. And finally, squash is king as it produces pounds and pounds of food. Start with a 4'x4′ or 6'x6′ plot of land and plant 2 summer squashes and 2 winter squashes two feet apart. Water the roots, not the leaves. If you don't have a yard, get creative like a friend with a yard, a community garden, or a local farm. In your own garden, build up your soil health with compost. When you are genuinely interested in learning, finding mentors willing to help can be easy. Jonathan's brother, Andrew who edits the podcast, has been interested in sustainable homesteading. Through the ChooseFI Facebook groups, he has found a community to learn from and is getting free room and board in exchange for work. You get so much power and understanding in your own life just by understanding the concepts of FI. You don't need to be at your FI number to achieve power and autonomy in your life. It starts the moment you decide to make small changes to make your life better. Neither Jonathan nor Andrew have reached FI, yet for all intents and purposes, they are living a financially independent lifestyle. The goal isn't to have the most money, it's to be post-money, which is beyond the point where money matters. What do you want your life to look like, and what do you need to pull that off? Suzanne sent in a question about expense ratios. She didn't know where to look to find out how much she is paying across their various investments. First, there may be a fee attached to the fund for it being executed the way it is, known as the expense ratio. Second, if access to the fund is through a financial manager, there could be an assets under management fee. The impact these fees can have on your investments is enormous. They can cost an investor millions of dollars over a 40-year time frame. Brad suggested Suzanne google the funds' names or ticker symbol and expense ratio, such as "VTSAX expense ratio". The result should be just one or two clicks away. To reduce costs, long-term investors should use a commission fee platform to purchase funds, such as M1 Finance when investing outside of your employer. Resources Mentioned In Today's Conversation Chris Guillebeau's "How to Conduct Your Own Annual Review" Grass to Veggies ChooseFI Episode 248 You are More than Your Social Capital with Laura Oldanie M1 Finance Review If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.

Many industries we once believed were recession-proof have proven otherwise. What can we do to build multiple streams of income and the resilience needed so that we're not reliant on anyone else for financial security? Side hustles and passive income are key strategies. Daniella worked for an IT company for four years when they laid her the weekend before her wedding. Luckily, she quickly found a remote job working as a contractor but was laid off from it as well. The layoffs ruined Daniella's confidence and self-esteem. Before the first layoff, she was living paycheck to paycheck and carrying debt. Occasionally, she needed to sell things for gas money until the next paycheck arrived. It was a financial low. Daniella still had the severance from her first job in an emergency fund and was encouraged to freelance to keep stable while looking for a new job. Freelancing was something Daniella had some experience with and reached out to an old client. The talent stack Daniella developed was not simply technical. She had a strong artistic and design background which was mostly self-taught. She says when going for a job interview, be upfront about all of the experience you have. Think about it and write it all down so you don't leave anything out. Not all jobs require the employee to be a world-class expert. Sometimes having a wide variety of experience and being able to synthesize different pieces of information is what employers need. The freelancing came out of panic. In addition to the debt, she had not been aggressively investing for retirement and believed the only way to go forward was a job. After finally landing a new job with a FinTech company, Daniella began reading about personal finance for her blog about the journey she and her wife were on to get their finances together. Dabbling is something Daniella has done since high school but it was never something she believed could be used to build wealth. Reading the stories of others changed her mind. The future became clear on what they had to do versus what they wanted to do. While her original side hustles only fueled her spending behaviors, they eventually morphed into doing fun things. Her wife is an expert in reselling guitars, and in addition to freelancing, Daniella also did thrift store flips, repaired items for resale, and sold her own paintings of live concert events. Daniella is in a much different financial position now. They have one year's worth of an emergency fund saved up, and all of their debt is paid off. They still have their side hustles, and her blog makes a third of what she makes in her full-time job. If she were to lose her job again, she would be able to reach out to the huge online network she's built over the last three and a half years. Facebook, Instagram, Reddit, and Twitter and great for networking. Daniella started by searching for different hashtags on Twitter. Jonathan loves Facebook groups. When there is something he wants to learn, he leans into Facebook groups to benefit his talent stack. Daniella believes Twitter is especially good for freelance gigs, while Instagram is good for anything since people expect others to slide into their DMs and comments on that platform. Since she can work remotely from anywhere and they have multiple side hustles, Daniella and her wife are working on a move from Missouri to Washington State. Resources Mentioned In Today's Conversation Give your child a headstart with their financial and nutritional well-being with Meal Planning for Kids. Watch shows live and on-demand with Fubo TV. Build a better real estate investment portfolio with Fundrise. Get started on your own journey to financial independence today at ChooseFI.com/start. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.