ChooseFI

It's no secret that Brad and Jonathan's families are board game fans. One way they can typically save 20-60% on the cost of board games is by watching for price drops on Amazon using CamelCamelCamel. Brad was able to save a substantial amount on the purchase of a squat rack simply by being able to stand by and wait for the price to drop. Listener Liz heard about CamelCamelCamel on the podcast and added a list of board games to her watchlist. She was eventually able to purchase all of them at roughly half the list price. Life may be the ultimate board game where your finances are a piece of it. When you know the rules, it makes it easy to win. Just like there are strategies for winning at Monopoly, there is an unwritten and unspoken framework for living a better life. Now that 2020 is getting back to a more steady-state, it may be time to start wargaming your finances and look at your risk tolerance. This year that stress-tested our investor policy statements and mindset. Perhaps you don't have the risk tolerance you thought you did. Times of stress and uncertainty are not the time to make changes. Adjustments should be made when times are calm. There are different variables to consider and one of the questions to ask is "How much does your life actually cost?". This can change over time and affect your risk tolerance. A couple of years ago, Brad intentionally increased his costs by moving to a more expensive home. Though it increased costs by 40-50%, they felt the life benefits would outweigh the additional costs. The only debt Jonathan has is his mortgage, reducing his structural expenses to housing, food, utilities, and insurance. He thinks even some of that could be cut down to support a survival budget if required. If this year has shown us anything, it's that your income source may not be a stable as you might have previously thought. You shouldn't be dependent upon anyone. There's a mindset of positivity that takes a terrible situation and figures out how to pivot. With your wargaming plans set, you can find a way out of it. Brad lived through a financial calamity at 22 years old when he worked for Arthur Anderson. After the Enron scandal, his company went out of business. He witnessed others who were living on the financial edge, but because Brad lived at home and had very little debt, he was fine. Jonathan says he doesn't mind spending a lot of money on an item, but he doesn't want to spend a lot of money on something that locks him into structural, recurring payments that make his life more expensive. If something were to happen to his business, Jonathan is confident that with the skill set he's acquired and one year of financial runway he's saved, he would have a very soft landing. The events of the last year have him reevaluating his investor policy statement, possibly driving changes to his investment allocation to a more conservative approach now that the market is at record highs. Jonathan is considering making these changes after riding the roller coaster of the last year and holding firm. Now that things are back to relative calm, he can make decisions based on knowing himself better, not based on fear. In the episode with Paul Merriman, he made the case for a portfolio that weights all of the asset classes evenly. Total stock market funds are cap-weighted, meaning the top companies make up a disproportionate percentage of the total market cap. Therefore, a disproportionate amount of your money is invested in these top companies and you aren't invested as diversely as you think. Jonathan has had half his money invested in a total stock market fund and half in a portfolio more similar to what Paul Merriman recommends through M1 Finance. Paul Merriman's method has gotten crushed in the last year, but over a 40 year window, it should bring higher returns. Jonathan is trying to figure out a mix that he is comfortable with. Another expense area to look at are investment fees. It used to be expensive to invest, but investment costs have become much more competitive. You don't need to spend 1% on commissions and another in expense ratios. Fees have gone to near zero if you look for them. Don't let people "help" by trading on your fear. War game your finances out. Think about the variables unique to you, analyze your risk tolerance, your income, your expenses, and what you have control over. This year's Year-End Wins episode will be a live podcast on Dec 8th at 7:30 pm Eastern time. RSVP for the live event at ChooseFI.com/2020wins. If you want to share your 2020 win, send an email to feedback@choosefi.com. This week's book winner is Abbey. She turned 22 this year, is almost finished paying off $17,000 student loans and maxed out her Roth IRAs for 2019 and 2020, as well as her 403b, 457, and HSA, and broke the $100,000 mark in her first year of nursing. Congratulations, Abbey! Resources Mentioned In Today's Conversation Register for The Simple Startup Winter Challenge and save 15% with promo code "podcast" Track prices on Amazon with CamelCamelCamel Make sure your payment systems are optimized and get more out of every transaction with Checkout.com ChooseFI Episode 194 The Role of Bonds in a Portfolio with Frank Vasquez ChooseFI Episode 097 The White Coat Investor ChooseFI Episode 091 The Stock Series Part 1 with JL Collins ChooseFI Episode 052 FIRE State of the Union with Todd Tresidder ChooseFI Episode 130 Paul Merriman Introduces the Ultimate Buy and Hold Portfolio The Simple Path to Wealth by JL Collins 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.

It's end-of-year tax planning time. As you get further along in your financial independence journey, there are likely more end-of-year tax planning items you'll need to be aware of. Having a checklist to review annually is useful. It's been an unusual year and December is that time to begin making end-of-year tax considerations. In addition to the normal checklist, there may be additional items to consider in this remarkably different year. Sean Mullaney says unique to 2020 are Roth conversions. While Roth conversions should be on the checklist every year, this year there was a much greater chance of diminished income which may provide the opportunity to make Roth conversions in a lower marginal income tax bracket. In any year when income is much lower than it normally is, Roth conversions would be at the top of your mind. The deadline is December 31 and there are no extensions. While complex situations may benefit from professional consultations, anyone with mostly W2 income can find their tax brackets online. If your income has dropped from 22-24% to 10-12%, locking in a Roth conversation at that lower rate is effective tax planning. A Roth conversion is when you go into a traditional IRA account and convert it to a Roth IRA. This is a taxable event, but you are intentionally choosing it because you are in a lower tax bracket for the year rather than convert or withdraw funds in a letter year when your income is higher and the taxes will be higher. How much money should be converted to a Roth IRA? Sean says he has never encountered a client who has had too much money in a Roth IRA. While the action is irrevocable, there is no penalty for converting too much. If a portion of the conversation is taxed at 22%, it is not the most efficient conversion, but your future self will likely still be quite happy that you did it. Some employers allow for Roth conversions within their 401K plans. The deadlines for completing some of these end-of-year tax planning checklist times vary. Solo 401Ks and qualified business income tax deductions should be completed as soon as possible. In addition to Roth conversions, another item with a Dec 31 deadline is charitable contributions. Checklist items with an April 15 deadline are traditional IRA, Roth IRA, and health savings account contributions. A good rule of thumb is individual tax accounts have a tax return deadline, not an end-of-year deadline. The reason solo 401Ks have an "as soon as possible" deadline is that unlike IRAs, solo 401Ks require more time and paperwork to do. It may not be necessary to have it funded by Dec 31, but you'll want it set up and have a well-documented game plan. S-corps do have to fund the employee-side by the end of the year. The first item on Sean's checklist is charitable contributions. With that category are two options to consider, a donor-advised fund if you plan to itemize deductions this year, or regular year-end charitable contributions. If you don't plan on itemizing, in 2020 up to $300 per tax return make be taken as a charitable contribution against your adjusted gross income. Another checklist item to be completed by the year's end are small business expenses since they are deducted when paid for, not when accrued. Businesses who have had a good 2020 may want to accelerate these payments to get the deduction this year. While businesses that have struggled in 2020 may want to hold off making payments until 2021. In response to a question from Brad regarding credit cards, Sean confirmed that credit cards work on a cash basis so the deduction takes place in the same in which the credit card was used, not when the credit card bill was paid. Paying bills with a check becomes a little trickier as you may need to prove to the IRS that the check was written and mailed on a business day prior to Dec 31 even if the vendor does not deposit the check until January of the following year. A backdoor Roth IRA applies when your income is too high to contribute to a regular Roth IRA. If you've done a backdoor Roth IRA in 2020, don't roll over any 401Ks, 403Bs, or 457s into tractional IRAs before Dec 31, wait until Jan 1 so it's not complicated by the pro-rata rule. To clean your investments up before leveraging the backdoor Roth technique, try and roll traditional IRA accounts into a new employer's 401K plan. Then implement the backdoor Roth IRA which may be done by April 15. Sean has a blog post describing the process to get clean with traditional IRAs before doing a backdoor Roth IRA. Tax-gain and tax-loss harvesting are also both Dec 31 deadlines. The stocks need to be sold by the end of the year. With tax-loss harvesting, you may not repurchase those securities within 30 days before or after the sale to comply with the wash sale rule. If you're in the 12% marginal federal income tax rate or lower, the capital gains rate today is 0%. You may want to sell stocks to diversify your portfolio or sell and rebuy the same stock to realize the large capital gain and reset your basis without paying federal income tax. Unlike tax-loss harvesting, there are no timing considerations to make when repurchasing the same stock with tax-gain harvesting. State income taxes may not favor capital gains in the same way the federal tax does. Keeping all of the rules and impacts of buying and selling straight can be confusing and time-consuming. It is helpful to keep your tax records as clean as possible by doing everything in a specific account for this purpose. Sean states that tax-loss harvesting should be a tactic and not a goal occurring only in years where you are down. State tax considerations to be mindful of are fourth quarter estimated tax payments and deduction planning. In California for example, it may be beneficial to take the standard federal deduction and itemize to take advantage of the state property deduction, possibly even pre-paying on property taxes. A FI framework allows you to play from a position of strength. The financial independence community can take advantage of timing their payments for certain things and make strategic decisions because they don't have the same issues with cashflow that people on a traditional path might have. While many in the financial independence community may be too young to think about required minimum distributions (RMD), it's good information to review for future planning. RMDs apply to all retirement accounts except Roth IRAs. Starting at age 72, minimum distributions will be required by Dec 31 or there is a penalty. However, in 2020, they have been canceled and you may want to convert it into a Roth. When you inherit an IRA, it doesn't matter how old you are. You are subject to an RMD or a 10-year rule. It would be wise to consult a tax professional when inheriting a sizable IRA. With an inherited Roth IRA, the account will have to be emptied within 10 years following the death of the original owner. Different rules may apply to eligible designated beneficiaries who may have RMDs instead. An adult who inherits a traditional IRA has a tax issue and probably will need professional assistance wit The year-end is a good time to update beneficiary designation forms. Financial institution accounts are governed by the beneficiary designation forms, not wills or trusts, so it's important to ensure these are up-t0-date. Year-end tax planning is great, but Sean likes long-term strategic tax planning to minimize your total tax over your lifetime. January is a great time to start long-term planning. As always, the discussion is general and educational in nature and does not constitute tax, investment, legal, or financial advice with respect to any particular taxpayer. Please consult your own advisors regarding your own unique situation. Resources Mentioned In Today's Conversation Register for The Simple Startup Winter Challenge and save with promo code "podcast" Compare quotes from top insurers with PolicyGenius Take complete control over your finances with M1Finance Sean Mullaney's 2020 Year-End Tax Planning article Get started on your path 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.

We're going back to basics and taking a deep dive into the Roth IRA and the levers, tools, and investing strategies available to investors. Although ChooseFI offers the free FI101 course, taking small actions are important. Get up to speed and start taking action with the free five-day challenge by going to ChooseFI/start. ChooseFI has presented basic investing strategies over the years and will revisit in the coming months to distill and hash out all of the different methods to understand the fundamentals. Many of the strategies have a lot of overlap starting with low-cost broad-based index funds. What they all share is a common-sense approach and simple investing strategy which is that time in the market is better than timing the market. Most traditional index funds are cap-weighted resulting in a higher percentage of money being invested in a few top companies. Rather than take a dogmatic approach to low-cost broad-based fund investing, it may require the application of scrutiny, being open-minded, intellectual honesty, and consideration. JL Collins helped open up Jonathan's eyes to the power of simplicity and helped give him the confidence to start doing better with his finances. But as the terms and concepts have become more familiar, other perspectives become visible, along with the pros and the cons, and the questions he's been able to ask have gotten better. The questions you have as you learn more are worth exploring to help build confidence in your plan. When investing, minimize fees as much as possible. Fees for buying and selling, expense ratios, and advisory fees are all negatively impact your long-term returns. We can learn new things and get rid of limiting beliefs. After a speculative real estate investment went poorly, Brad was afraid of real estate investing. However with some security, knowledge, and looking at it as a business, he has now invested in two single-family rentals which are doing well. Financial independence is not finances. It's not money, health, or time. It's all of it. It's making objective, fair-minded judgments about societal norms, seeking the truth, and making decisions in our best interests. Sean Mullaney is a big proponent of the Roth IRA and the possibility of using a Roth IRA as an emergency fund. Sean says that I all his years of practice, not one of his clients has ever had too much in Roth accounts. The advantage of the Roth IRA is flexibility. With a workplace 401k, your employer does not have to allow distributions and if they do, it is probably subject to penalties and taxes. In contrast, contributions may be withdrawn from a Roth IRA at any time, tax and penalty-free. In a world of uncertainty, you never know when you'll need access to these accounts, whether in an emergency or for early retirement. A Roth IRA can do double duty as an emergency fund and as retirement investing until a separate emergency fund can be established. Sean recommends reading the article on FItaxguy.com explaining Roth IRA Withdrawl and microlayers. Backdoor Roth IRAs are for high-income earners who do not qualify for regular Roth IRAs. Roth IRAs are funded with earned income up to an established limit outside of workplace retirement accounts. Roth IRA limitations for 2021 are a modified adjusted gross income of $198,000-208,000 for married couples and $125,00-140,000 for singles. For an emergency fund, only contributions that may be withdrawn from a Roth IRA. Over the course of contributing for many years, the balance should have grown, but only the contribution amount may be withdrawn tax and penalty-free. Roth IRA earnings may be withdrawn tax and penalty-free only if held in the Roth IRA for five years and you are 59 1/2. Contributions should really only be withdrawn for early retirement or in the event of an extreme emergency, not for minor emergency expenses as the money cannot be put back in. Sean says the same rule applies to health savings accounts. Leave the money in to grow tax and penalty-free because when you take it out, you stop the growth. Pay out-of-pocket instead and document the expenses to claim in the future when you really need the money. Brad and Jonathan scan their invoices into a Google drive. For those on the path to FI, unexpected expenses like a stained ankle are unfortunate events, not emergencies because FI puts you in a position of strength with additional options. This week's book winner is John, who negotiated a $100 per month rent discount by prepaying six months in advance using money saved for a future home down payment. The new location also allows John to bike to work saving on transportation costs. With this year being so tough for people, Jonathan thought back to an episode with Bradley, who made over $1 million in ten years with Salesforce. Intrigued by the conversation, he contacted Bradley again to see if his success was replicable. As a result, they built a training and job placement program and launched the Talent Stacker podcast. One of the students in the course was able to land a new job making $70,000 within 42 days of starting the program after being laid off from COVID. If interested in learning more about the program, visit talent stacker.com/salesforce. As always, the discussion is general and educational in nature and does not constitute tax, investment, legal, or financial advice with respect to any particular taxpayer. Please consult your own advisors regarding your own unique situation. Resources Mentioned In Today's Conversation Register for The Simple Startup Winter Challenge and save 15% with promo code "podcast" Enroll in ChooseFI's free financial independence training course ChooseFI episode 019 JL Collins The Stock Series Part 1 Sign up today with M1 Finance and get $10 to invest Purchase an ebook bundle from ChooseFI Publishing and get 15% with code "holiday15" ChooseFI episode 272 Understanding Compound Growth and Investing for Beginners Get started on your path 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.

As the ChooseFI community continues to grow, it's necessary to discuss some fundamental basics that serve the audience who are just getting started, as well as provide a refresher for those who have been on the path for a long time. In this episode, we revisit the magic of compound interest and investing for beginners. Getting to financial independence where work becomes optional and your investments are producing enough income to live off of for the rest of your life is easier when you understand why saving and investing now is important. Kimberly asked a question in the ChooseFI Facebook group requesting help understanding compound interest and the basic principles of a compound interest account. Investopedia states that interest may either be simple or compounded. Simple interest is based on the principal amount. In contrast, compound interest is based on the principal amount plus the interest that accumulates on it every period. For example, in a simple interest calculation, a deposit of $1,000 earning 10% interest each year would earn $100 in the first year, resulting in a balance of $1,100 in year one, $1,200 in year two, and $1,300 in year three. In a simple interest calculation, the interest percentage is not applied to the interest earned beyond the initial principal. The real world, however, works on compound interest, which is based on the principal amount and the interest that has accumulated. Using the same example of $1,000 in principal and 10% interest, after the first year, the balance is the same at $1,100, but in year two, interest is calculated on the new balance, resulting in $110 of interest and a new balance of $1,210 going into year 3. It starts small in the early years but really ramps up later on. Using simple interest, a $1,000 investment at 10% will have earned $4,500 (45 years x $100), for a total of $5,500. To illustrate why compound interest is often called the 8th wonder of the world, when using compound interest, that $1,000 investment at 10% grows to $72,890. The difference becomes even more apparent when using the example of $1,000,000 earning 10% simple interest versus $500,000 earning 10% compound interest. After 45 years, the simple interest balance grows to $5,500,000, while the smaller $500,000 principal grows to $36,500,000 with compound interest. When you don't spend everything you make and invest in compound interest vehicles, you can be well on your way to becoming a millionaire or multimillionaire. Einstein has been attributed with saying, "Compound interest is the 8th wonder of the world. He who understands it, earns it…he who doesn't…pays it". The benefits of saving and investing are not limited to the end of the 45 year period. There are benefits all along the way. Compounding returns are always working in your favor, creating income that you don't need to work for anymore. It's rare to earn a high enough income to become wealthy, but saving reasonable amounts of money and investing it can bring wealth in an intermediate amount of time. Where does a beginner go to start investing and earning compound interest? There's usually no one there to hold our hands and walk us through the process. Based on a video Brad recorded for The Simple Startup discussion how credit cards aid him while other pay interest on them, one of the students asked how Brad figured out how banking works and not pay interest on his credit cards. Using a credit card is frictionless for Brad. Not only are there excellent fraud and theft protections when using a credit card, he very rarely has to pay any fees to use it and he also has until the end of the statement close, followed by the statement due date to pay it off, which can be weeks after the purchase was made. As long as you pay in-time and in-full each month, there are no fees or interest when using a credit card. It is effectively an interest-free loan from the credit card company making it a great tool for those who have their financial life in order. You don't need to be afraid of credit cards, you just need to understand how they work. Do not get one if you cannot pay your balance on-time and in-full. You can reduce the friction and schedule it to autopay on-time in-full each month. There are studies that show people who use credit cards tend to spend 12% more on average. That may be true, but it's likely not the same people who understand the power of compound interest. The FI community is focused on increasing our savings rate, paying ourselves first, and buying back our own time. If you value something spend lavishly on it. If you don't care about something, why are you going to spend your money on Resources Mentioned In Today's Conversation ChooseFI's suite of financial calculators Learn ChooseFI's 3-card cashback strategy and earn $1,000 or more Get started on your path 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.

In a world of uncertainty, how can we future-proof our skillset and also create an environment to help our kids thrive as adults? Growing up, Brad never thought about entrepreneurship, but as he has gotten more into this FI mindset, the concept has shifted for him and how he is a model and mentor for his girls. While Brad initially thought virtual learning might not be good, he has reframed it and now believes his daughters will look back on this year as a time when they were living their best life. Both girls have gone through The Simple Startup workbook, but Molly seemed especially taken to it. After spending a day last week cleaning out one of Brad's garden beds in her free time at home, his daughter Molly and her friend have decided they would like to start up a landscaping business. It may be that you just need to see the framework and behavior model for entrepreneurship. The business idea may not be as important as understanding the framework for building a business as quickly as possible. Brad sat down with Molly to help her think her way through what it is she is capable of and really wants to offer with her business. Whether or not her gardening endeavor ever takes off is less important than the thought process they worked through which can help her out the next time she has a business idea. Having these conversations with your kids is a great way to connect and future-proof their lives. While the majority of people in the world will never become entrepreneurs, it's good to start thinking like an entrepreneur and have evidence of what you have skills you have built. The Simple Startup still has openings for the Winter Challenge. One student from a previous course is 9-year-old Analise, who while hesitant at first, ended up crushing it with her business, Creative Card Designs. The concept behind Creative Card Designs are fun personalized cards you would want to send to someone to say hello, thank you, or for occasions like birthdays. Analise hand draws each card. She has some designs that can be personalized but also takes design requests. Her business mission statement is: To connect people by making quality, personalized cards for different occasions. Keeping her business under control, so far Analise has sold two cards. She wants to make it bigger, but sometimes she messes up and burns through her materials just making one card. So she's trying to scale her business by going digital. This will allow the cards to still be personalized, but make it easier on her. After coming up with the idea, starting the business, and creating different designs, Analise has set up a website for online ordering which goes directly to her Gmail account. Currently, she's charging about $5 a card and making a $2 profit, but by going digital, it will be easier to make the cards and allow her to possibly drop her prices. Brad thinks Analise will be able to test out the price for her cards and find the perfect per card price. Analise's motivation for starting the business was to make money, but also thinks it's good to learn how to take control of your own things and not always have to work for someone else. Andrea, Analise's mother, says the business has been going well and that her daughter has enjoyed learning and adding to her knowledge base. Andrea appreciates that someone is providing support and guidance when they have these ideas. Analise didn't go into the class with the card idea in mind. she had several ideas she was torn between and sought feedback from Rob and her classmates before settling on the personalized card business. Her advice to other budding entrepreneurs is that you have to come up with an idea for something people actually want, as well as something that will be profitable. She says that if you have a business, don't give up too quickly, and you have to work hard at it if you want to be successful. Analise isn't too afraid of failure. After drawing designs and spending all her money on materials, she realized she needed to just figure out another way. Andrea says that she's seen her daughter develop a sense of enablement, that she can come up with an idea and watch it grow, and also learning to persist when things aren't always simple or easy. The Simple Startup instructor, Rob, modeled coming up with solutions to get past obstacles the students encountered. Learning isn't about reciting facts, but learning how to flex your creative muscle and problem-solve to get things done. Andrea says The Simple Startup Camp was much more of a value proposition than she had expected. Being virtual, it was low-pressure, but also comprehensive and detailed with all the aspects of what's required to run a business. Analise even went through a mind-mapping exercise to assess her strengths, resources, and likes to come with a business idea. Although some lessons were virtual, Analise was always an active participant. Students in the camp had Rob and each other to reach out to if they were stuck. It was like her very own mastermind group. Anyone interested in purchasing a card from Creative Card Designs may visit creativecarddesigns.wordpress.com, fill out the Google form, and Analise will get back to you. Payment will be made with Venmo. Analise is laying the groundwork for success, whether with this business of one in the future. Brad himself started several businesses before reaching some degree of success with Richmond Savers, Travel Miles 101, and finally ChooseFI. He picked up skills and knowledge all along the way. Since recording the podcast segment with Brad and Jonathan, Analise has gone digital, contacts more people, and doubled her orders. There's no fear of failure. It's iterative and failing forward. Once put into practice, all of the skills learned along the way while building a business become demonstrated skills for college and job applications. Adding skill to your talent stack and thinking like an entrepreneur is something that the FI community does well. Brad loves being able to read listener emails, like the one from Laura who found ChooseFI episode 265 Talent Stacker, really resonated with her. Because of Jonathan's story, she now realizes that she isn't stuck working as a veterinarian forever and can find something else that lights her fire. Many professionals like Jonathan and Laura took out six figures of student loan debt only to find that it wasn't a fair exchange. Getting rid of the student loan debt is tough, but it's the right choice. It will give you options. While Jonathan can point to a lost decade in his life that he spent in pharmacy school, it's an intellectual exercise. There was an opportunity cost, but there are no sunk costs anymore. Jonathan recently found a website and associated app called Supercook which allows you to save money by shopping your cabinets. After completing an inventory of your cabinets, the website will find recipes you can make by only adding a few ingredients. How much money could you save using up what you already have on hand? Reach out to feedback@choosefi.com and let us know the results. It's been a tough year for the ChooseFI local groups, but some are still meeting virtually or for socially distanced activities, like hikes. David wrote in saying Brisbane, Australia just has its first meetup. 2021 is bringing better things and we are coming back. ChooseFI is looking to do a grand meet up at a conference next Fall called The Unstuck Project. The date is still to be determined. This week's FI Weekly winners are Josh, Sheena, and Hayden. After finding the podcast this summer. since April, they have turned their garage into a guest house and listed it on Airbnb, bought an investment property, contributed all of his wife's income to her 401K, began contributing to an IRA, opened an M1 Finance account, opened a Roth IRA for their son, are closing on a second investment property soon, and opened a Chase Sapphire Preferred card. Resources Mentioned In Today's Conversation ChooseFI episode 269 Let's Make Lemonade With a Twist Register for The Simple Startup Winter Challenge Join the Facebook group, ChooseFI Meals and Recipes Purchase a ChooseFI Publishing ebook bundle and get an extra 15% off with code Holiday15 Easily shop for and compare life insurance with PolicyGenius Learn ChooseFI's 3-card cashback strategy and earn $1,000 or more Get started on your path 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.

One of ChooseFI's most popular guests is back! Dominick Quartuccio returns to talk about after the shock of 2020, how to bounce back and what it looks like to design your life for next year. Brad's relationship with Dominick goes back to when they were in college together. After reconnecting several years ago, Dominick has become a source of inspiration and a mentor to Brad. In previous episodes, conversations with Dominick have centered around the idea of drift. It's the state of existence where we think we're making intentional decisions with our lives, but in reality, it is habits, patterns, unconscious beliefs, expectations, societal pressures, etc. that are really driving decisions. It's only when an outside force, normally a quite dramatic one, forces itself upon us that we wake up from that state of drift. For the first time in human history, the entire world is going through an experience together. It's caused everyone some sort of pain, whether it was losing a loved one, a financial loss, or anxiety. Most of us have gone through periods of suffering in the past that when we look back on them, those were the moments that made us into the person we are today, and given the choice, we wouldn't change them today. Instead of wishing to speed up 2020 and get it over with, Dominick encourages us to pause and look at the past year to see where you've been and highlight the standout moments. The purpose of this exercise is so that we can envision a 2021 that has the potential to be the most meaningful, fulfilling, and prosperous year of our lives. In his role as a leaser, Dominick has seen behind the curtain of people's personal lives and noticed a distinct difference between those who have an inner foundation of work leading up to the pandemic and those who have never done the work. Fortifying your inner foundation allows you to be strong and thrive if there are tougher times in the year ahead. There are two parts to the exercise of designing the next year of your life: looking back at the year you just had and looking forward to creating the year that you want. Dominick places inner work underneath the umbrella of personal development. Where personal development could be an external skill to better yourself, such as reading a book to learn a new skill that can be applied in the real world, inner work is oriented inward, like examining what lights you up. When the conditions of the outside world change, when you've done the inner work, you don't feel shaken and you are standing on something stable. We've experienced more emotional turmoil in the last year than any other, making it worthy of introspection. In the last year, what were some of the standout moments, both the highs and the lows, beginnings and endings, new and lost relationships or jobs, and the trials and tribulations? Start with going back and looking at your calendar. Looking at it will trigger memories of travel or meetings. Next, go through the photos you've taken. There may be some real standout moments you've forgotten recorded on your phone. Finally, review your journal or scroll through any notes you've taken to see what you were thinking, seeing, and what your attitude was. After looking back, begin looking for themes. Was it bringing your life back into balance, loss, finding love? This year Jonathan and his wife got on the same page of their work-life relationship and she's embraced the idea of building her talent stack which has helped them have a common direction in their marriage. COVID has allowed Jonathan to watch his kids as they grow and evolve into different people every week. He has also lost 20-30 pounds, winning a bet he made with himself on Healthy Wage. He embraced the idea of community and is doing weekly calls with his father and JD Roth. He watched the income for his business take a nosedive and then recover from working to build new lines of revenue. He also built two new businesses using skills acquired in the last four years. He says it was his best year ever. Dominick posed the question to Jonathan about how he would've handled the same downturn to his business if it had occurred three years ago. Jonathan said he's a completely different person now and doesn't know how he would have interacted with who he was three years ago. This year has proven he has grit, determination, and gets stronger during times of trouble. For Brad, he and his family did CrossFit together five days a week for months. His theme is togetherness and it wasn't limited to his immediate family. The mastermind group he belongs to with Dominick was part of it. He's also been able to see his parents more this year and had the time to spend talking with his daughter who was experiencing anxiety and trying to work her way through it. Brad thinks what was important about this year was being able to see the hard work of parenting come to fruition. Dominick mentions that during a normal year, these moments speed by. The pandemic has forced us to slow down and meet these moments. But when things start to speed back up again, are we going to fall back into these old habits, or are we going to pause and be there for these moments? Our brains are hardwired to keep us safe, but many times the anxiety and creation of negative hypotheticals are not serving us. Realizing them helped both Brad and his daughter. The pandemic has shined a light on mental health. What did you learn about your own mental health this year? Additional questions to ponder are these. What milestones of FI did you experience this year? What relationship emerged as the most important this year? What did you discover about your physical well-being? One last question to consider is what is something you would like to leave behind in this year? An emotion, a belief system, a recurring complaint? Jonathan would like to leave behind the hours he spends that aren't helping to move him forward or bring him joy, like watching Netflix and scrolling through social media, but the thinks being productive 16 hours a day isn't the goal. Moderation may be his goal for 2021. Next, what are some things you want to carry forward with you into the next year? A sense of inner peace, togetherness, clarity? Give yourself space to think about it. What is an area of your life that is ready for the next big level up? Start by writing down many of the areas ready for a level up. after coming up with a list of 5-15, look for the one that really jumps out at you. Use this terrible year to springboard into the best year of your life. Courage is Dominick's theme for the next year as he works to figure out how to get out there and help more men live their fullest potential. This goal for next year does not need to world-changing, just meaningful, and something that inspires you to see what you are capable of. Brad knows that being present is an area he could work on and he could put separation in place to make that easier and make his life better. Napoleon Hill states in his work that the number one step in creating any meaningful change is to build a burning desire. What's the one decision that you could make that would allow you to be focused 365 days a year on that burning desire? Dominick will be holding a The Great Man Within 90 minute interactive webinar on Dec 16th for designing the next year of your life and in January, a free 30 day men's mental health challenge. To register for either, visit The Great Man Within. Resources Mentioned In Today's Conversation ChooseFI Episode 185 Adapting to the New Normal Register for The Simple Startup Winter Challenge and get 15% with the code Podcast Check out ChooseFI's review of the Chase Freedom Flex Open high-yield savings account with CIT Bank Get started on your path 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.

ChooseFI Facebook Community Manager recently posted a meme that hit home with Brad. It said, "Plot twist: 2020 has actually been the best year of your life. You faced challenge after challenge, you've adapted, and you've overcome. 2020 has forced you to grow exponentially. Don't take that for granted." 2020 had been Jonathan's best year ever. Instead of giving in to fear, doubt, and insecurity, he decided to lean in. By being more intentional with the things that were important to him, like his health, Jonathan has lost 20 to 30 pounds and is in the best shape of his life. Jonathan also sought to build his personal talent stack and built two new businesses. He is feeling more agency and is more fulfilled than at any other point in his life. Previously, Jonathan's beliefs about himself were all based on external validation. But as he began to get more freedom and autonomy in his life, he began to question those beliefs and reclaim his identity statement. Learning that things such as student loan debt is good debt and you'll have to work until retirement age, just aren't true allowed him the space to challenge the status quo in other areas of his life. Initially, he even questioned whether the success of ChooseFI was the result of a random lightning strike of luck. However, he's taken his interest-led learning and skills he's learned, applied them to two new business models, and achieved success with them. The interest-led learning Brad and Jonathan frequently discuss on the show helped Jonathan lean in March, and it also lead Brad's eight-year-old daughter, Molly, to learn how to cook a perfect pan-seared chicken breast just like Gordon Ramsay. The things you believe about yourself become part of your identity statement. But you can turn the limiting beliefs around and say that you're the type of person who can learn anything. It may be just a Google or YouTube search away. You can reframe your identity by asking yourself what you want it to be. Though she isn't running now at nine months pregnant, part of MK's identity is that she is a runner. However, in high school, she was the slowest person on the team. She thought she couldn't do what the other's on the team were doing, but her coach didn't have the word "can't" in his vocabulary. His mindset is something she has carried through to other areas of her life. MK challenges you to take the word "can't" out of your vocabulary too because once you aren't allowed to use it, your mindset will shift and you can begin to redefine who you are. A case in point for the power of working to get 1% better was in the news last weekend when Chris Nikic became the first person with Down Syndrome to complete a grueling Ironman triathlon. Emblazoned across his shirt was his training mantra, "1% Better". You can make a choice every day to live your life a little bit better and when your finances are in orders, everything else gets a little bit easier. You make the choice not to deprive yourself by saving money, to empower yourself, and put yourself in a position where you have the freedom to think about all the other things that truly matter, like health, relationships, and spending time how you see fit. While it's about making a choice, if you don't get up off the couch and take action, nothing is going to get better. If you have a question you'd like to have answered on the show, submit them by going to ChooseFI.com/voicemail. Or reply to Brad's weekly email, The FI Weekly. Get on the list by going to ChooseFI.com/start. The first mailbag question this week comes from Sara who wants to know how to master financial independence when you don't have a 401K. Sara has been working through the podcasts and read, ChooseFI: Your Blueprint for Financial Independence, but her husband is a bartender and doesn't have a 401K. W-2 employees without access to a 401K could consider being an advocate and talking with their employer about getting a 401K like Waffles on Wednesday talked about when they were on the show. Just giving employees access to a 401K does not have to be cost-prohibitive and can be a win for both owners and employees of small businesses. It's important to remember there are no rules to FI. Just because others are talking about maxing out their 401K and then doing a Roth conversion ladder, doesn't mean that's what you have to do. Brad admits it wasn't until the last two years at his job before he maxed out his 401K contributions. The path to financial independence does not depend on a 401K. It's predicated on savings rate. The goal is to save that in the most-advantaged way possible. Between marginal tax brackets and child tax credits, it may be fie just putting money into a Roth IRA, which has a $6,000 limit this year. If you have your own side hustle, you have options for retirement accounts, like a SEP IRA or solo 401K. A SEP IRA is easy to set up through any major online brokerage firm and put in roughly 20% of your income. There are potentially even higher thresholds for solo 401Ks when contributing as the employee and employer. The next question is from Conner who wants to know how best to allocate his 25% savings rate between a 410K, Roth, IRA, and savings account. The purpose of saving money isn't only for retirement. Save for life and having options. Brad thinks Conner is doing a fantastic job saving and while it would be easy to say "put it in the 401K", having all of his net worth in tax-deferred vehicles may not be the best physiologically. Rather than stick it in a savings account, he could invest in the stock market with a brokerage outside of a retirement account. As much as Jonathan loves Vanguard, it's not the easiest brokerage to open an account with. In comparison, Fidelity is much easier and still provides access to low-cost broad-based index funds. An upcoming episode will feature Sean Mullaney to review in-depth 401Ks and Roth IRAs. One of the major differences between the two is that contributions to a Roth IRA may be withdrawn tax and penalty-free, which can act like an emergency fund. Join us and share your wins! This year ChooseFI will be holding a LIVE year-end wins episode on December 8th at 7:30 pm Eastern simulcast on Facebook and YouTube. It will be replayed as the final podcast episode of the year. Subscribe to get a reminder at ChooseFI.com/2020wins. For a chance to win a book from ChooseFI Publishing, share your wins by replying to Brad's weekly newsletter. This week's first winner is Cory, who as of last week caught up on all episodes of the podcast after two and a half years of listening. After implementing many of the actionable tips and set Cory is set up for financial success and went from a negative net worth to hitting over $100,000 at the beginning of October. The second winner this week is Jo. Jo and her husband found ChooseFI while she was on maternity leave earlier this year. During that time they refinanced their mortgage, getting a better rate and eliminating PMI, canceled subscriptions, lowered their cell phone and car insurance bills, enrolled in Sofia.org course for Jo's remaining college electives, was promoted at work and negotiated a substantial raise, will max out 403bs, and opened a non-retirement brokerage account. Also, while focusing on their health, Jo lost 70 pounds and her husband lost 40. Jonathan won his weight loss challenge with Healthywage.com and received a check for $2,419.67! Set a bet for yourself by going to ChooseFI.com/healthywage. Resources Mentioned In Today's Conversation Purchase a ChooseFI Publishing ebook bundle and get an extra 15% off with code Holiday15 ChooseFI Episode 094 Solo 401K versus SEP with Waffles on Wednesday ChooseFI Episode 155R Year End Tax Planning with Sean Mullaney Easily shop for and compare life insurance with PolicyGenius Learn ChooseFI's 3-card cashback strategy and earn $1,000 or more Get started on your path 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.

Optimize your finances during your 20s, no matter what your income is, and build significant wealth. But what are your options when working an entry-level job when you have a large amount of student loan debt? Amy's first job out of college was an entry-level position earning $30,000. By the age of 25 had a $100,000 net worth and has tripled her salary in the last few years by learning how to market herself. The average cost of a four-year college degree in 2019 is $122,000. Amy was fortunate that her parents paid for college and she graduated with degrees in Communications and International Relations without any student loan debt. She graduated without any job offers and her only source of income came from waitressing which wasn't enough to live in Boston on. After a couple of months, she contacted a temp agency and got a job earning $15 an hour. Nearing the end of college, she saw that recent graduates weren't getting the jobs they had hoped to get. She calls that time her "Year of Fear" because she didn't have much in savings and terrified of what was going to happen. For the rest of the year, she continued to work full time at her temp job and waitressing on the weekends. With the benefit of hindsight, she realizes she has an average amount of skills as anyone else coming out of college, which is inadequate for the realities of today. The ultimate goal of going to college is to graduate and get a well-paying job. But the focus is on grades and prerequisites, not how to find mentors, write a resume that resonates with people, or navigate the application process to get the jobs you actually want. The way the job application process works now is broken While there may not have been any skill Amy believes would have initially made landing a job easier, it would have helped to find people who agreed to meet and interview her in the first place. After submitting resume after resume to company websites and since times out of ten hearing nothing, Amy emphasizes flipping the script and having the companies and recruiters come to you. Amy was able to go from $30,000 to $93,000 a year by learning how to market herself on LinkedIn so that people found her. What makes you stand out and how can you improve your chances? The first step is to decide what it is that you want. If you are marketing to everybody, then you are marketing to nobody. Next, start looking at the job positions and titles that you want, study the job applications for those positions, the job requirements, descriptions, and language used. Using that verbiage in your resume or LinkedIn profile allows hiring managers to see that you are perfect for the role and HR departments who use algorithms to narrow down the prospects, which relies on keywords that your resume or profile will likely also have. It can be difficult to figure out what you want at the age of 20. Amy chose a degree in Communications because it could apply to almost anything she wanted. Though she says to figure out what it is you want, figuring out what you want for just the next couple of years is fine. You can always pivot, but you just need a direction for your resume. Employers don't generally look for someone well-rounded, instead, they are looking to fill a specific need. Show you can fill that need and you're more likely to be hired. The salary increase she received for her second job out of college was pushed by the recruiter Amy was working with who found her on LinkedIn. Amy continued to use the same tactics with her next move but added in extras that may not have been relevant, like her HTML skills. That one change opened the door with recruiters looking for marketers who also understood coding. Landing that job bumped her salary up to $86,000. Answering the question, "What do you do?", always results in a simple answer, like Marketing, not what you actually do or what skills you possess. When helping out a friend earlier this year with his resume, Amy noticed that the skills section of his resume didn't speak directly to his particular skill set for the jobs he wanted. You don't have to be world-class at anything, but with the right variety of skills, you can stand out because there are fewer people who have that intersection of skills. Earlier this year, Amy started her blog, We Want Guac, after looking at different finance blogs while trying to figure out what to do with her new and higher salary. Building the blog has continued to add to her talent stack. Amy says that in 2016 she was the ultimate cheapskate, attending events to take advantage of the free food, and ordering small items when eating out with friends. The salary increases enabled a shift in mindset from deprivation to one of abundance. Part of her mindset shift came out of creating a budget. Her budget didn't mean restricting herself from spending. Instead, the numbers showed her the limits could be more than she expected and it would be okay if she did spend more. It gave her permission to spend more on herself, leave more in tips, and give to charity. Like the saying by Jocko Willink, discipline equals freedom. Amy's budget was the discipline that gave her the freedom to see her limits could be bigger and move beyond the mindset of scarcity. The goal of We Want Guac is to help people better understand how to manage their money. When doing the math, Amy calculated that a 25-year-old with $65,000 invested in an index fund can retire with $1,000,000 at the age of 65 without ever investing another penny. With a net worth of $100,000, she figured she could retire at 50, and if she continued to save, she could retire in her 40s or even her 30s. Amys says having $100,000 saved in your 20s makes an incredible difference. It is five figures of investment growth during bull markets and it is security in downturns. Resources Mentioned In Today's Conversation Get a discount on ChooseFI ebook bundle get and additional 15% off with code Holiday15 Register for The Simple Startup Winter Challenge and get 15% with the code Podcast ChooseFI Episode 121R How to Get Any Job Get started on your path 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.

Following US Election Day results, it's important to remember the alligators and kittens, a concept to approach overall mental wellbeing. The negative influences in life are alligators and all of the things that make life better are kittens. Focus on getting rid of the alligators. It's a human bias to focus on the negative. How do you focus time and attention on the things that make life better? For Brad, he cut watching the news out of his life which has helped him to achieve a better mental framework for life. The business model of the new is to keep you watching through the next commercial break. They cause anxiety. You can stay informed without being a part of that model. Control what you can control and you will be in a better financial position four years from now regardless of the election outcome. There is so much outside of our control right now and worrying about it isn't productive. Despite the number of people who are confident they know what will happen to the stock market as a result of the election, the fact is that we just don't know. Market uncertainty is one of the reasons to have a plan for your money regardless of what is going on and automate it. Not only is it difficult to try and time the market, but you need to get it right twice, both when you buy and when you sell. The FI community is about long-term thinking. It's not about quarterly earnings or even five-year trends, but performance over multiple decades and the decisions that will help get you to the wealthiest point over that time period. With that long-term thinking in mind and in a time of calm, it's a great time to write down your investor policy statement. Having a plan for your investments, written down in an investor policy statement helps you to avoid being reactionary or make rash decisions. In February, the Dow hit a high of 29,500. By March 20th, it had dropped 20-30% and many predicted it would go even lower. Defying the dire predictions, the Dow recovered 30-40% of its gains within a few months. The problem with making market predictions is that there are far too many variables for you to account for and again, you have to get it right twice. Even the professions are wrong 50% of the time. What chance do you have of making your investment decisions around emotion enough to stay solvent or long-term or outperform the market over the long-term? Essentially no chance. The highest likelihood of long-term financial success is to control the expenses on your investments. Low-cost index funds are going to be your best bet. Following your investor policy statement and injecting new money when you can benefits you with dollar-cost averaging. Time in the market is much more powerful than timing the market. ChooseFI listeners are creating space and making progress in their lives. Patty commuted to paying off debt within five years and just made her last payment, including more than $40,000 in credit card debt. Joe replied to Brad's email, The FI Weekly, Joe shared that he and his wife transferred his 403(b) from a high-fee broker to Vanguard and also started on their journey to earning travel rewards by opening a Chase Sapphire Preferred card. November 8th is the LAST CALL to apply for the Chase Sapphire Preferred card with its highest-ever bonus of 80,000 Ultimate Rewards points after spending $4,000 in the first three months. For more info, go to ChooseFI.com/CSP. Teachers are primarily the ones using 403(b)s, most of which are laden with really high fees and very few options. ChooseFI plans to have an episode in the coming months with Dan Otter discussing doing better with your 403(b). Crystal sent in a message saying that she had no idea about fees and was investing with Edward Jones. Her investments hadn't done much over the last five years and now she's educating herself, but the fees appear to be hidden. Since the market has done so well over that last five years, the reasons why Crystal hasn't made money are because she wasn't invested in a strategy that allowed her to keep up with the market or she was getting crushed by the fees. Brad says finding the expenses for his old company's 401k options was relatively easy. Included in the table of investment options, one of the columns listed expenses. Other titles may be expense ratio or expense percentage. The numbers may range from 1.50 to 0.03. Without a nicely organized table, you may need to look up the expense ratio by looking up the ticker symbol. A low-cost index fund investment strategy is simple and not complex enough to require help from a professional. In contrast, a complex investment plan is probably costing you a lot of money. With an actively-managed fund, a person, or team of people, are making decisions on what to buy and when to sell. Through the fees, you end up paying them for their time. And then the data shows that they aren't even keeping up with the market. The difference between expense ratios of 0.1% and 1.0% is tens of thousands to millions of dollars over time after compounding. Brad ran through a scenario originally published to RichmondSavers.com reviewing the impact fees have on an investment portfolio over a 40-year timeframe. The result was that a high expense ratio and advisor fees cut the potential net worth in half. Even target-date funds may not get the returns you expect because they are too conservative for you. It's good to think about what you are invested in and how much it is costing you. ChooseFI's new website is now live! Check it out at ChooseFI.com or ChooseFI.com/start. There are still some issues to be fixed, but if you are having trouble finding anything let us know and send us your feedback to feedback@choosefi.com. The feedback on The Simple Startup classes has been overwhelmingly positive. Kids aged 10-18 have been getting off the video games and acquiring new skillsets to future-proof their lives. Rob Phelan has figured out how to offer the course year-round and the next session starting January 18th is open for enrollment. Registration will be open until January 8th or until it sells out. Previous sessions have always sold out. Register at ChooseFI/startup for The Simple Startup between now and November 15th and save $10. Use promo code "podcast" and save another 15%. Share what you are doing and how your life has changed by replying to Brad's email newsletter, The FI Weekly, and have the chance to win one of the books from ChooseFI Publishing. Sign up at ChooseFI.com/start. Christian Choosefi'd his view of the pandemic. He's focused on the positive things, like spending more time with his family, time to exercise, eating healthier, and saving $4,500 this year. Resources Mentioned In Today's Conversation The Simple Path to Wealth by JL Collins ChooseFI Episode 019 JL Collins The Stock Series Part 1 ChooseFI Episode 220 HelpFix My 403(b) Vanguard Funds and the Impact on Your Investment article published on Richmondsavers.com Start building a better portfolio today at Fundrise and get your first 90 days of advisory fees waived Cut your unlimited wireless plan with Mint Mobile Register for The Simple Startup Winter Challenge and get 15% using code podcast Get started on your path 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.

Yanely grew up in a low-income household in Brooklyn and then attended Brown University. But by the time she graduated, she had accumulated a bunch of credit card debt that she was hiding from her family. She tried to figure out dealing with her debt on her own by reading books, listening to podcasts, and watching YouTube videos. After paying it off, she thought it was ridiculous she had never learned it in school and started her own YouTube channel to share her story. That eventually led to her landing the perfect job and a solid career path. Growing up, there wasn't a lot of money in Yanely's household, so there weren't many conversations about money either. When there was talk about money, it was always negative and caused tension. One thing that her father did teach her was to never have a loan or owe debt to a friend or family member and that she needed to always pay them back. Interestingly, that sense of obligation did not transfer over to institutional borrowing which she believes is a common mindset in neighborhoods like the one where she grew up. When Yanely was accepted to Brown University, she had no idea how expensive it was going to be. Although she received a full scholarship, she discovered she still need to purchase things such as textbooks, a laptop, and other supplies. Because her father taught her not to borrow money from anyone, she wanted to figure it out on her own and applied for her first credit card. She attributes her attempt to be resourceful using credit cards to a lack of financial literacy. She thought she was doing the right thing and on the right path at the time. Her payment history was good since always made the minimum payment and never missed a payment on her credit cards, but her credit utilization was high as she was always close to maxing out her card limits. With each credit card application, banks continued to give her credit cards with higher and higher credit card limits. Trying to keep up with the rich kid lifestyles of her classmates ended up getting her $15,000 in debt. Moving from a neighborhood filled with Caribbean immigrants to an elite university was a culture shock. Yanely felt like she didn't fit in because she didn't talk or act like her fellow students. Not understanding expressions and phrases others used made her feel dumb. Going from a top performing student in high school to feeling like being in the wrong pack may be part of the reason why it's physiologically difficult for low-income who attend prestigious universities. Yanely says the biggest thing a low-income student can do is expose themselves to the rigorous language and vocabulary that is going to be expected of you. Students are often not prepared for how much harder they will need to work, it ends up being a shock, and they go home. Approximately 2/3 of her credit card debt came from spending on just trying to keep up with her fellow students. Although there was no overt peer pressure, it was unspoken. Straight A's and scholarships are not enough. Students like Yanely need to have both academic and social grit to survive in an environment that is not in their comfort zone. Reading The Millionaire Nextdoor to help her figure out how to pay off the debt, she noticed the descriptions of poverty and generational poverty were describing the life she was living. She decided she was going to be the one to shift the trajectory of her family in terms of wealth. Yanely had a choice to make between continuing a pursuit to fit in and look good while racking up debt, or the alternate route of smashing her debt aggressively and begin to build wealth, breaking he cycle of poverty. The interviews of people who didn't come from wealth surprised her, opened her eyes, and completely shifted her mindset. She realized she was going to need to completely wipe her mental slate clean and start with new and fresh beliefs about money and how it works. Thomas J. Stanley and William D. Danko, authors of The Millionaire Nextdoor devised a formula for determining if you are as wealthy as you should be. That formula is: Your Age multiplied by Your Annual Income (from all sources except inheritance) divided by 10 = Your Expected Net Worth Growing up in a neighborhood where spending to reflect success and social status was prevalent, Yanely understands the pressure and had never imagined there was a different route. Her beliefs were shaken to the core listening to interviews of self-made millionaires answer questions and discuss the strategic money decisions they made with a clear goal in mind. It opened her mind and made Yanely want to explore more. Despite FI not even being in her purview a handful of years ago, Yanely just hit Coast FI after beginning to maximize everything she was doing with her investments and prioritizing tax-efficient investments before even paying her rent. Yanely paid herself first. After learning more about 403bs, she determined her priority should be a Roth IRA. She then invested as much as she could to qualify for the company 401k match. Whatever was left after the investments was used to pay for living expenses like rent and food, and has cut down on her fun money budget. Being obsessed and hungry for knowledge helped Yanely pick up personal finance lessons so quickly and go from being in credit card debt to maximizing her investments. Her goal was to learn everything she could and begin producing a result in 90 days. She feels that there is an injustice that these things were never taught in her community, her family, or even at her Ivy League school. Previously, she would have asked an expert or others for advice and take it. she no longer believes that is a good strategy for solving her problems. She thinks you need to question the experts' motivations and do your own research. This is especially true with investing. Her goal with Coast FI was to invest enough that she's be a millionaire by the age of 65 even if she had never invested another dollar again. that meant she needed to hit $250,000. Initially, Yanely's goal was to be an agent of change for herself. Now she wants to be an agent of change for others through her YouTube channel where she cold share her story. As a teacher, she realized that teachers were also never taught about personal finance in school. Teachers teach students about all kinds of topics, but not about money. Financial literacy is lacking and being passed down from generation to generation. An organization reached out to her to come on their podcast where they talk with teachers about money and personal finance to help give them the knowledge and skills to teach it in the classroom. She is know on staff doing educational outreach. She says her impact through coaching or her YouTube Channel is limited, but seating change in the education system and reforming the way students are learning in school is the kind of change she is after. Resources Mentioned In Today's Conversation Get a discount on ChooseFI ebook bundles using the code Holiday15 Register for The Simple Startup Winter Challenge and get 15% using code Podcast Easily find coupon codes and save money when you join Honey Get started on your path 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.