What is our most precious resource? What would you go without in order to retire early? What things in life do you value above all else? What would you spend your time doing if you did not need to work?
FIRE is a hot acronym right now. It stands for Financial Independence Retire Early, and it is a growing movement of like-minded individuals sharing the goal of retiring early, sometimes in their 20s.
At its core FIRE is simply being extra intentional with your everyday spending. It prioritises a new mindset around money, with the long term goal of not needing to work a regular job. FI or financial independence is everything associated with the years before hitting that FIRE number, before pulling the pin. Before resigning from the very career that got you there in the first place, before you ride off into the sunset in your Toyota Camry. In other words, the boring stuff we can all be doing right now for the benefit of our future selves.
Please note: I compiled this post as the 2020 Coronavirus COVID-19 pandemic was unfolding. Considering its affect on global financial markets, employment security and national economies I considered holding it off and not making it live. However, when reading over the FI principles and values I realised this content could be more relevant than ever. It is not my intention to undervalue or overlook what is happening in the world right now, nor does this constitute any type of financial advice.
The individual concepts around the idea of FI have existed for generations, however they seem to have grown obsolete and recently been rediscovered. In a cult-like way.
…life optimisation techniques and a re-frame that involves money, focuses on money yet does not prioritise money…
“The fire is spreading!” That is the war cry of Jonathon Mendonsa, founder and co-host of the Choose FI podcast. He reached out to accountant Brad Barrett to launch their passion project back in 2017 and since then the pair have grown their brand Choose FI exponentially, like compound interest.
Advertising and marketing works, especially when you do not even realise that it is having an impact on your thinking. “Have a look around, see all those things? They used to be money!” Our brains are trained for short term fixes, little sugar hits that makes us feel warm and fuzzy and deserving and rewarded. But they do not last and thus do not work.
Choose FI is now branching out into the realms of blog posts, YouTube videos, online courses and even a non-for-profit foundation. However, for me the value truly lies within the podcast episodes.
The genius in what Brad and Jonathon have built is actually their unmatched collection of archived experts all openly discussing their personal stories. They have recorded a delicate and fascinating timeline of passionate individuals speaking about life optimisation techniques and a re-frame that involves money, focuses on money yet does not prioritise money.
Downunder Dad’s Top 20 Choose FI Podcast Episodes:
- 20 – Episode 38 – The Why of FI – Brad and Jonathon
- 19 – Episode 21 – The Pillars of FI – Brad and Jonathon
- 18 – Episode 76 – Planned Spontaneity – Mrs. Adventure Rich
- 17 – Episode 19 – The Stock Series – JL Collins
- 16 – Episode 67 – Raptitude and Free To Pursue – David & Helene
- 15 – Episode 91 – Building a Rental Real Estate Snowball Machine Without Debt – Rich Carey
- 14 – Episode 70 – Your Money Or Your Life – Vicki Robin
- 13 – Episode 29 – The Aspiring Minimalist vs The Reluctant Frugalist – Brad and Jonathon
- 12 – Episode 105 – You Can Afford Anything But Not Everything – Paula Pant
- 11 – Episode 168 – Make Time – John Zeratsky
- 10 – Episode 61 – Mindfulness and FI – Cory Muscara
- 9 – Episode 162 – The Four Tendencies – Gretchen Rubin
- 8 – Episode 65 – Meet the Frugalwoods – Liz
- 7 – Episode 131 – Community Building – Mr Money Mustache & Mr 1500
- 6 – Episode 97 – The Good Dad Project – Larry Hagner
- 5 – Episode 157 – Atomic Habits – James Clear
- 4 – Episode 82 – A Wife’s Perspective – Laura And Dani
- 3 – Episode 33 – Design Your Future – Dominic Quartuccio
- 2 – Episode 96 – Drift – Dominic Quartuccio
- 1 – Episode 100 – Welcome To The FI Community
*** Please be advised that I am a boring, middle-aged, middle-class, white, straight, male, married parent. These are the episodes that I enjoyed most for this season of my life. Your experience may vary. May contain traces of nuts.
Each Friday Brad and Jonathon do their Choose FI Friday Roundup. They produce a separate podcast episode that looks at their weekly show in more detail, bringing in feedback from their extensive, passionate and knowledgable audience. All of these are worth exploring, these weekly episodes add great value for listeners. A very clever idea from the team at Choose FI, instigated during the early days.
The variety and expertise of the Choose FI podcast content is remarkable. Plus being in audio format, it is efficient to consume. Whether you are stuck in a daily commute or enjoying a leisurely bike ride along the beach (the more FI option), Brad and Jonathon make a great addition to your adulting life. And like they like to say, “we are the average of the five people we spend the most time with”. And you and I could do a lot worse than listening to two smart blokes collecting tips, hacks and ideas to help them win at life.
However, whether you believe it is one of life’s undiscovered super powers or not, there is no denying the quality of the Choose FI content library.
This is my love letter to Brad and Jonathon, my gratitude. This is me paying it forward, this is me hopefully helping to broaden the horizons of my beloved DD readers. Financial independence is rebutted and resisted by the media and the masses, it is questioned and ridiculed. It might not be for you. However, whether you believe it is one of life’s undiscovered super powers or not, there is no denying the quality of the Choose FI content library.
There are many life lessons riddled throughout Brad and Jonathon’s information and plenty to explore during everyone’s separate Choose FI journey, so have a crack and just get yourself involved.
Sounds bloody obvious right? However, there are countless psychological factors that go into our modern selves actually doing something. We need to be capable of overcoming the umpteen distractions that fight for our attention and the added obstacles we place in front of ourselves. We need to create the time, not just find it. We need to prioritise and plan and pursue. We need to self-motivate and give ourselves permission to fail. ChooseFI would never have existed if Jonathon didn’t reach out to Brad for a burger and casual chat initially. And this humble Downunder Dad website would never have been born if I never actually did anything about it, obviously. Their podcast and guest interviews are full of “actionable tips” that get you up off the couch and away from Netflix. It can be as minor as sending a simple SMS that makes you accountable to meet up with a friend at the gym, or as major as selling your depreciated, credit-funded vehicle. Nothing happens unless you take action.
Make intentional decisions
This is the single most predominant message of Choose FI, and the FIRE community as a whole. It is simple, but not easy. Think about what you are doing, be conscious of your choices. The road to financial independence is not about deprivation, it is about prioritising what you value. It is simply about spending less than you earn (your savings rate) and investing the rest in an index fund. To widen that gap between incoming “income” (oh I get it now) and outgoing spending we simply need to stop our brain running on impulse mode. When you stop and consider how many purchases you make on auto-pilot each week it is scary, at least it was for Downunder Dad. Pausing and placing some conscious thought into that space between our stimulus and our response will save you thousands of dollars… often.
Author of the book Design Your Future and popular repeat-guest of the Choose FI podcast Dominic Quartuccio struck a chord with me when discussing drift. Drift is the rut we find ourselves experiencing when we just let life happen to us. We accept the way things are and succumb to a creeping feeling of helplessness, fearful that they cannot change. Quartuccio discusses many adults in their 40s and 50s (especially parents) drifting through decades of hopeless inevitability. A rather bleak outlook until you realise that there is scope to run towards that which lights you up. Question what you are doing, who you are doing it with and how you are choosing to spend your time.
Drift is the rut we find ourselves experiencing when we just let life happen to us. We accept the way things are and succumb to a creeping feeling of helplessness, fearful that they cannot change.
Avoid using your stupid human brain
This refers to both the above concept of intentional decisions and also buying index funds. Do not take the time to think about it, just do it regularly and enjoy the benefits. If the market is rising, buy index funds regularly. If the market is falling, buy index funds regularly. People get excited on mass whenever anything is on sale for a reduced price, except shares! Do not let your analytical thoughts get in the way of contributing to your portfolio consistently. Incidently, being based in Richmond, Virginia (in the USA) they recommend VTSAX, but for folks like myself in Australia we have our fair share (hehe) of options. You can look at VAS which is our Aussie equivalent of a stock exchange traded fund (ETFs), or something else from Vanguard’s suite of products (just gravitate towards the low-fees), AFIC (the favourite of the Barefoot Investor) or other ASX listed investment companies (LICs). This might seem confusing but really it is just a regular savings plan that trumps any bank interest you will ever get over a long-term timeframe anywhere, ever. It is silly to save at a slower rate than inflation, we are really getting into the weeds here (a phrase I stole from Brad and Jonathon!) However, you basically just want to have your savings working hard for you, after setting yourself up to generate savings in the first place.
Happiness is the goal, not stuff
What do you value? Like really love, what brings you happiness? If you write down a list of all the things in this world that make you smile, not too many of them will be related to things. It will be a list about people and experiences, about time spent creating relationships and memories. Mrs DD and I did this as separate exercises and then came together to compare our individual lists, it was an enlightening undertaking. Her list included things like exercise, family dinners and travel while mine reflected my love for relaxing, sport, playing with our children and kid-free nights out just the two of us. Neither of us wrote down leather interiors, brand name shoes, the latest iPhone or a sprawling alfresco.
Never go into a furniture store
Creating friction between ourselves and the activities we identify as being bad for us is a clever approach. Jonathon’s explanation for avoiding furniture stores is my favourite example of implementing this type of resistance. The logic is simple, yet rarely recognised. Everything in any furniture store is going to be nicer than the things you own, so do not go in. With this powerful concept in your personal mentality not only will you remove the temptation to upgrade what you already own, but you will also grow more appreciative of how nice your furniture actually is. Plus there will be no thoughts of applying for an interest-free store account to go home with large household items which you cannot really afford. This is one of my favourite mindsets from Choose FI that is relevant across society, across all consumerism – not just with furniture.
Splash the cash in the direction that makes you smile most by ditching the costs that do not matter.
Saving money beats making money
Controversial statement warning: If you save an extra $1,000 per month you will be better off than if you receive a $12,000 pay rise. — Plus if you are living off $12,000 less per year then you will need less money to retire. Also, savings happen right away, they are an instant improvement to your personal balance sheet. It is hard to earn more income and generate increased rates of pay, while not spending money is hella easy! Living frugal is not an unwilling and unrelenting existence of depriving yourself. It does not mean being cheap or tight or rude or scummy. It is finding and recognising what you value and pouring your spending into that bucket. Splash the cash in the direction that makes you smile most by ditching the costs that do not matter. Besides, you were going to get that $12,000 pay rise anyway!
Stories make the world go round
The most compelling and intriguing aspects of the Choose FI podcast are when Brad and Jonathon discuss the real-life experiences of their guests’ and their FI journey. Real stories, actual dollars, honest timelines and pure vulnerability usually with a happy ending. When you mix these stories with the hosts sharing their own experiences it is a rich cocktail of valuable insights and lessons. The stories are what I remember, along with the characters who are telling the tales.
“when you have good habits time is your ally, and when you have bad habits time is your enemy”– James Clear (Atomic Habits)
Small changes over time
One of their most popular podcast guests was James Clear author of the book entitled Atomic Habits who spoke knowledgeably about processes rather than fixating on results. A simple tweak in modern mindset but a powerful idea. One quote that has implanted itself in my brain is that “when you have good habits time is your ally, and when you have bad habits time is your enemy”. Brad and Jonathon often refer to “the aggregation of marginal gains”, the accumulation of progress over time, likening it to the compounding interest associated with finance. When we do beneficial things over and over we will, well… benefit! This works with finances, relationships, health, parenting, fitness and… everything.
What have you built?
The Choose FI Friday Roundup episode 88R is entitled What Have You Built? I loved it, it inspired this DD concept, the blog, website and eventual podcast. When we create something from scratch it can be representative of many things. It provides a sense of accomplishment and independence, it generates a voice, a platform and even a community. Working on Downunder Dad has given me a hobby, a passion, goals, enjoyment and long term vision. When you step back and appreciate what Brad and Jonathon’s financial independence has afforded them (our most precious resource, time) and what they were able to build, it is inspiring (as wanky as that sounds!)
I probably need to stop myself here. I feel like I could easily continue listing more and more lessons learned, but you will just need to go and explore Choose FI for yourself.
There are many other enthusiastic individuals generating high-quality FI-related content from all parts of the world. A quick search on social media or Google will uncover plenty of options for you to delve into for yourself. For me, this broadening of my horizons has been an additional value-add from Choose FI, listening to their wide-ranging guest interviews has lead me to many other resources and personalities.
In summary, here is a look at the (hugely simplified) rundown of what Choose FI claims they are all about:
- Savings (save 40% of your income)
- Lower living expenses (optimise your spending, be intentional)
- Eliminate debt (makes mathematical sense)
- Use travel rewards (great for US citizens, shit for Aussies)
- House hacking (creative ways to reduce the burden of rent or a mortgage)
- Car hacking (another massive expense)
- College hacking (great for US citizens, shit for Aussies)
Here is a look at lessons learned by DD from Choose FI:
- Take action
- Make intentional decisions
- Don’t drift
- Avoid using your stupid human brain
- Happiness is the goal, not stuff
- Never go into a furniture store
- Saving is king
- Stories make the world go round
- Small changes over time
- What have you built?
Now it is your turn, what little nuggets of gold are out there just waiting for you to discover them? Implement small changes, little life hacks, tiny tweaks. Soon they will just be the way it is. Then you can introduce more.
Brad and Jonathon always explain that you should start with episode 100 and see if the concepts grab you. If you enjoy it, then move yourself onto the DD top 20 episodes listed above, and be sure to let me know how you go.
I certainly pick and choose which aspects of Choose FI that I take on board for my own personal situation. Although there is plenty of US-centric discussion, most of the ideas are universal. The information will invariably be interpreted differently by each individual listener and it might not be for you.
Like anything in life we all gravitate towards different things. Choose FI is about life optimisation and I am all for it. Financial independence is all about making intentional money decisions with a larger, long-term plan in mind – and I am all for that too.
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