WEBVTT - The Simple Steps to Achieve Fire #224 0:00:00.080 --> 0:00:02.600 Welcome to How the Money. I'm Joel and I and 0:00:02.720 --> 0:00:26.000 Matt and today we're discussing the simple steps to achieve fire. Yeah, Joel. 0:00:26.079 --> 0:00:29.160 Even though achieving fire, which by the way, that means 0:00:29.360 --> 0:00:32.760 financial independence retire early. We talked about this last week 0:00:32.880 --> 0:00:34.639 and this is a little two parter series that we're 0:00:34.680 --> 0:00:38.920 doing on financial independence retiring early. Though the steps are simple, 0:00:39.360 --> 0:00:42.279 that doesn't necessarily mean that they're easy, right. This is 0:00:42.320 --> 0:00:44.400 a big goal to try to get to the point 0:00:44.400 --> 0:00:46.040 to where you don't have to work, where you could 0:00:46.080 --> 0:00:48.400 retire early if you wanted to to where you are 0:00:48.440 --> 0:00:51.400 financially independent. That's what we're gonna talk about this episode. 0:00:51.400 --> 0:00:53.960 We're gonna talk through the specific steps that we all 0:00:54.000 --> 0:00:57.120 need to take regardless of what our financial independence retire 0:00:57.160 --> 0:01:00.040 early journeys look like. We're gonna get really practical with 0:01:00.120 --> 0:01:02.840 this episode, Buddy, Yeah, Man, Fire obviously an incredible goal. 0:01:02.880 --> 0:01:04.240 You know, we talked about the pros and cons of 0:01:04.280 --> 0:01:06.960 it last week, but yeah, there are some specific things 0:01:07.040 --> 0:01:09.560 that you need to do in order to achieve that goal. 0:01:09.680 --> 0:01:12.240 And it's not a goal necessarily for everybody. But I 0:01:12.280 --> 0:01:14.039 think one of the key tenants of fire that we're 0:01:14.040 --> 0:01:15.840 gonna talk about two is that you really do have 0:01:15.840 --> 0:01:18.880 to be intentional about every single dollar. And Matt, before 0:01:18.920 --> 0:01:20.399 we get to talking about fire, I wanted to tell 0:01:20.400 --> 0:01:22.679 you some way I was trying to be really intentional 0:01:22.720 --> 0:01:25.560 about my money. Uh just here. It just this past week. So, Man, 0:01:25.600 --> 0:01:28.759 I drove our family downtown recently for a protest against 0:01:28.880 --> 0:01:30.720 racial injustice, and I'm trying to figure out where we 0:01:30.720 --> 0:01:32.480 were going to park. And normally I would like to 0:01:32.600 --> 0:01:35.360 ride my bike downtown with the kids, but with all 0:01:35.400 --> 0:01:37.320 of us going with like a nap time for the baby, 0:01:37.360 --> 0:01:39.279 we just had to drive for and it made sense. 0:01:39.640 --> 0:01:41.560 And I was trying to figure out where the cheapest 0:01:41.560 --> 0:01:44.080 place to park was near the place we were going. 0:01:44.600 --> 0:01:47.360 And so, like a super money nerd that I am, 0:01:47.560 --> 0:01:49.920 I was googling for websites that would help me find 0:01:49.920 --> 0:01:52.640 the cheapest parking. I found this website called parko Pedia 0:01:52.760 --> 0:01:56.760 and legit, yeah it's like I think, yeah, it's like Wikipedia, 0:01:56.800 --> 0:01:58.280 but for parking or something like that. And I don't know, 0:01:58.520 --> 0:02:00.400 but no, they did a really good job kind of 0:02:00.480 --> 0:02:03.320 kind of laying out the map and telling me how 0:02:03.360 --> 0:02:05.960 much it costs to park at different places. And so 0:02:06.080 --> 0:02:07.640 I ended up finding a place it looked like it 0:02:07.680 --> 0:02:10.040 was nine dollars if I parked before ten am early 0:02:10.080 --> 0:02:11.720 bird special. I was like, cool, I'm gonna hit that. 0:02:11.840 --> 0:02:13.720 I want to be there, and you know, a lot 0:02:13.760 --> 0:02:17.359 of other places were and I think park O PD 0:02:17.480 --> 0:02:19.280 did a good job. But it turns out I didn't 0:02:19.280 --> 0:02:22.120 do a good job. I didn't really fine print. So 0:02:22.160 --> 0:02:25.080 the early bird special only applies if you leave after 0:02:25.440 --> 0:02:28.440 two pm. We weren't staying that long, so I had 0:02:28.480 --> 0:02:30.120 to pay a full twenty bucks man, And that's the 0:02:30.200 --> 0:02:33.120 kind of thing that a guy like me absolutely hates. 0:02:33.200 --> 0:02:35.080 Like it was, it was really tough leaving that parking 0:02:35.120 --> 0:02:37.280 lot and being like, man, I just gotta stuck with 0:02:37.280 --> 0:02:39.160 the twenty dollar bill for parking when I tried to 0:02:39.200 --> 0:02:41.720 plan ahead. Frugal fail. Man. So did you use the 0:02:41.720 --> 0:02:44.040 website or did you download the app onto your phone? 0:02:44.240 --> 0:02:46.320 I used the website website, so I've never heard of 0:02:46.320 --> 0:02:48.040 the site, but I saw that they do have an app, 0:02:48.480 --> 0:02:50.200 and I was gonna say that if you had the apps, 0:02:50.240 --> 0:02:51.840 and you should leave a review, because you can leave 0:02:51.880 --> 0:02:54.960 reviews for individual decks or parking lots. I was looking. 0:02:55.000 --> 0:02:57.200 It didn't seem like there are a ton of reviews 0:02:57.280 --> 0:02:59.160 or you know, feedback within Atlanta. So I don't know 0:02:59.200 --> 0:03:02.480 if that means it's just maybe a newer service for Atlanta. 0:03:02.560 --> 0:03:03.920 But this is the kind of thing though that I 0:03:03.960 --> 0:03:07.480 love seeing anything that's crowdsourced, where folks are participating in it. 0:03:07.600 --> 0:03:09.600 And so hopefully next time you'll have the app, you 0:03:09.639 --> 0:03:11.560 can leave your feedback and that can let the next 0:03:11.639 --> 0:03:14.080 guy know that they got to stay there until, you know, 0:03:14.360 --> 0:03:17.239 way after nap time for the baby. Yeah, it felt 0:03:17.280 --> 0:03:20.400 like a little bait and switch. Maybe I don't know. Also, 0:03:20.440 --> 0:03:22.000 probably I just didn't read the fine print, So I'm 0:03:22.000 --> 0:03:23.680 gonna blame that one on myself. But for other people 0:03:23.680 --> 0:03:26.320 who do park in areas that are kind of expensive, 0:03:26.919 --> 0:03:28.720 maybe that app or that website can be helpful to 0:03:28.800 --> 0:03:30.600 people to find a parking garage that is going to 0:03:30.680 --> 0:03:33.359 be cheaper. And yeah, read the reviews because people will 0:03:33.480 --> 0:03:35.960 chime in and and tell you what they found wrong 0:03:36.320 --> 0:03:38.240 with that parking deck. But for those of us who 0:03:38.240 --> 0:03:40.440 are money nerds into saving every dollar, I sight like 0:03:40.480 --> 0:03:42.320 that can be helpful for sure. I mean, that could 0:03:42.360 --> 0:03:44.400 be a great resource if you're looking for free or 0:03:44.440 --> 0:03:47.480 cheap parking. Uh, let's introduce our beer for this episode. 0:03:47.480 --> 0:03:50.320 We are gonna drink uh Speedway stout and this is 0:03:50.360 --> 0:03:54.320 an Imperial stout with coffee brewed by Ale Smith. These 0:03:54.320 --> 0:03:56.160 guys are out of San Diego. We actually mentioned them 0:03:56.200 --> 0:03:58.400 on a recent episode. It's one of the many wonderful 0:03:58.400 --> 0:04:01.120 brewers they're out of that great ay there in California. 0:04:01.320 --> 0:04:03.880 Looking forward to sharing listen with you, Man, me too. Man. 0:04:04.000 --> 0:04:05.920 All right, let's get onto to the subject at hand. 0:04:05.960 --> 0:04:09.320 Today we're discussing the simple steps to achieve fire. And 0:04:09.400 --> 0:04:11.320 last week on the show, Matt, You and I we 0:04:11.440 --> 0:04:14.360 shared how we feel about the Fire movement. We talked 0:04:14.360 --> 0:04:17.240 through the pros and cons, the things that we really 0:04:17.240 --> 0:04:18.840 like about the movement and the things that we kind 0:04:18.839 --> 0:04:21.239 of feel are lacking, and we really came down on 0:04:21.279 --> 0:04:22.760 the side of the fact that we think that the 0:04:22.760 --> 0:04:26.120 movement has been more helpful than harmful by by a 0:04:26.160 --> 0:04:28.120 long shot. But at the same time, we're not all 0:04:28.200 --> 0:04:30.200 in on it, and we discussed kind of the specifics 0:04:30.200 --> 0:04:31.960 on why. So if you didn't get a chance to 0:04:32.000 --> 0:04:33.880 listen to that one, we would say give it a shot, 0:04:33.960 --> 0:04:35.839 go check that one out. This episode, we're going to 0:04:35.880 --> 0:04:39.000 discuss exactly how you can achieve fire. If that's something 0:04:39.040 --> 0:04:41.160 that you are interested in. By the way, to Matt, 0:04:41.200 --> 0:04:43.040 I wanted to to make a note that Fire is 0:04:43.080 --> 0:04:45.880 not only for hyper young people. It's not only for 0:04:46.040 --> 0:04:49.560 millennials and younger. People in their forties and fifties are 0:04:49.600 --> 0:04:52.040 finding out about this movement and it's changing how they 0:04:52.080 --> 0:04:54.599 handle their finances, and it's causing them to rethink the 0:04:54.600 --> 0:04:59.280 traditional notions of retiring at six later. So this show 0:04:59.279 --> 0:05:01.840 today is deaf only for all of our listeners. Yeah, 0:05:01.839 --> 0:05:04.080 we don't only have twenty five year old listeners. Sometimes 0:05:04.120 --> 0:05:06.160 I think maybe we have forty five or fifty five 0:05:06.200 --> 0:05:08.480 year old listeners to uh. You know, it's also important 0:05:08.480 --> 0:05:12.480 to note that, depending on your specific situation, Fire could 0:05:12.480 --> 0:05:15.600 of course be much harder to achieve. You know, if 0:05:15.600 --> 0:05:18.200 you're miired in the student loan debts, or you're working 0:05:18.240 --> 0:05:20.960 a low paying job for a nonprofit because maybe you 0:05:20.960 --> 0:05:23.920 love the work, Fire will most definitely be a more 0:05:24.000 --> 0:05:26.480 difficult accomplishment. If this is you, then there's a good 0:05:26.520 --> 0:05:29.480 chance that the retire early part of Fire, that that 0:05:29.520 --> 0:05:31.440 won't even be a goal of years at all, you know, 0:05:31.480 --> 0:05:34.239 if you do love the work that you do. However, 0:05:34.440 --> 0:05:37.560 the financial independence portion of Fire, you know, I think 0:05:37.560 --> 0:05:40.520 that's something that we should all be striving towards. And also, 0:05:40.680 --> 0:05:42.720 the biggest question we're gonna answer in this episode is 0:05:42.800 --> 0:05:46.479 how to actually achieve fire. And granted that journey is 0:05:46.480 --> 0:05:48.600 gonna look different for for everyone, but there are certain 0:05:48.640 --> 0:05:51.239 principles that are the same regardless of what your journey 0:05:51.279 --> 0:05:54.800 looks like. Yeah, and we wanted to discuss specifically how 0:05:54.839 --> 0:05:57.800 to achieve fire for two reasons. Two major reasons, Matt. 0:05:58.080 --> 0:06:01.080 One I think is is seeing bigger potend possibilities. It 0:06:01.120 --> 0:06:04.040 can be motivating and eye opening. I know that in 0:06:04.040 --> 0:06:06.920 my financial journey before I heard about fire, I had 0:06:07.040 --> 0:06:10.200 some basic assumptions about personal finance, and then hearing the 0:06:10.240 --> 0:06:13.760 depths of what other people were able to accomplish was 0:06:14.000 --> 0:06:17.040 inspirational and motivational to me. It kind of opened up 0:06:17.040 --> 0:06:20.000 a world of possibilities in personal finance that just didn't 0:06:20.000 --> 0:06:21.880 even know we're there. And because of that, it helped 0:06:21.920 --> 0:06:24.760 me number two reframe my own goals like and and 0:06:24.800 --> 0:06:26.440 that can be the same for many of our listeners 0:06:26.480 --> 0:06:28.599 as they kind of hear about this subject and here 0:06:28.760 --> 0:06:31.400 the details on how to achieve fire. Many of our 0:06:31.440 --> 0:06:34.040 listeners are ambitious when it comes to their money, dreams 0:06:34.279 --> 0:06:36.200 and so laying out the framework of what it will 0:06:36.240 --> 0:06:38.400 take to attain fire, it can be so helpful, right, 0:06:38.680 --> 0:06:40.800 And even if fire isn't on their radar, I think 0:06:40.839 --> 0:06:43.920 anybody who just wants to pursue financial independence or just 0:06:43.960 --> 0:06:46.359 like curious about how they can save more and do 0:06:46.440 --> 0:06:48.400 better with their money, they're going to find this episode 0:06:48.400 --> 0:06:50.400 helpful too. Yeah, man, And I like what you said 0:06:50.400 --> 0:06:53.640 there about just the possibilities that are just out there 0:06:53.640 --> 0:06:56.560 for us. When we are aware of fire, and when 0:06:56.600 --> 0:06:59.000 we know that it's something that we can pursue, it 0:06:59.040 --> 0:07:01.360 opens up our mind, you know, it opens our eyes 0:07:01.400 --> 0:07:03.920 to the different possibilities and just all the different options 0:07:03.920 --> 0:07:06.080 out there. We don't have to follow the script of, 0:07:06.560 --> 0:07:08.840 you know, retiring at age sixty five, Like there's a 0:07:08.920 --> 0:07:11.160 chance you could retire at forty five or maybe even 0:07:11.440 --> 0:07:13.600 thirty five, you know, if you really get after it. Well, 0:07:13.600 --> 0:07:16.160 I'm already past that point, so you definitely can't go 0:07:16.240 --> 0:07:19.400 back in time. But fire does not offer that possibility 0:07:19.400 --> 0:07:21.560 for others out there. So let's go ahead and simplify 0:07:21.680 --> 0:07:25.480 achieving fire down to the essential roots. Basically, you just 0:07:25.520 --> 0:07:28.480 need to massively increase your savings rate, and then you 0:07:28.520 --> 0:07:31.560 need to invest the difference. That sounds pretty simple, right, 0:07:32.240 --> 0:07:34.760 but the nuts and bolts can actually be pretty revealing. 0:07:34.800 --> 0:07:37.640 So we're gonna discuss the actual specifics of how to 0:07:37.720 --> 0:07:39.960 achieve fire, and we're gonna get to that right after 0:07:40.000 --> 0:07:51.760 the break. All right, we're back from the break, and Matt, 0:07:51.800 --> 0:07:53.760 we're gonna get to the math and we're gonna get 0:07:53.760 --> 0:07:56.320 to the investment accounts and all that stuff in just 0:07:56.400 --> 0:07:58.000 a little bit. But the first thing you need to 0:07:58.040 --> 0:07:59.760 do in the first step I think you need to 0:07:59.800 --> 0:08:03.240 take when you decide that pursuing fire is for you, 0:08:03.680 --> 0:08:06.320 is that you have to change your current relationship with money. 0:08:06.480 --> 0:08:08.080 And there are a few things that we have to 0:08:08.120 --> 0:08:10.480 discuss on this front before we can kind of move 0:08:10.520 --> 0:08:12.920 on to those other things. Last week, when we talked 0:08:12.960 --> 0:08:15.480 about the impact that the larger goal of fire can 0:08:15.480 --> 0:08:18.600 have on your mindset, it can be powerful. And then, well, 0:08:18.680 --> 0:08:20.640 if you really want to reach fire in a reasonable 0:08:20.680 --> 0:08:23.000 time frame, you're going to need to have a real 0:08:23.080 --> 0:08:25.200 change and how you relate to money. Right, You'll need 0:08:25.280 --> 0:08:28.840 to begin to enjoy the gamification aspects of personal finance. 0:08:28.840 --> 0:08:31.280 We've talked about that before, Matt, And then you'll want 0:08:31.320 --> 0:08:34.440 to let that overarching goal influence the money choices that 0:08:34.480 --> 0:08:37.920 you make every single day. Bringing your lunch to work 0:08:37.960 --> 0:08:40.360 every day and biking through the rain can be kind 0:08:40.360 --> 0:08:42.800 of actually instead of a bumer, it can be part 0:08:42.920 --> 0:08:46.120 of the excitement with your goal in hand, giving you 0:08:46.200 --> 0:08:48.840 the fuel to make those choices that are going to 0:08:49.080 --> 0:08:51.480 save you lots of extra money in order to help 0:08:51.520 --> 0:08:54.200 you reach that goal more quickly. Yeah, that intentional hardship 0:08:54.240 --> 0:08:57.240 can actually sometimes boost our happiness, right, And part of 0:08:57.280 --> 0:09:00.480 this is just rethinking happiness and what happiness is for us. 0:09:00.720 --> 0:09:03.040 We all know deep down that the most satisfying things 0:09:03.040 --> 0:09:06.680 in life are oftentimes free, and that also are Spending 0:09:06.720 --> 0:09:09.560 can dig us into a hole that creates stress and 0:09:09.679 --> 0:09:12.800 just more anxiety. So part of what fire, you know, 0:09:12.880 --> 0:09:16.720 gets really right is actually prioritizing what brings us meaning 0:09:16.960 --> 0:09:18.840 and then just ditching the rest. You know, This is 0:09:18.840 --> 0:09:22.600 how achieving fire can look different for everyone. It depends 0:09:22.600 --> 0:09:25.640 on what it is that you're prioritizing. Achieving fire doesn't 0:09:25.679 --> 0:09:28.240 necessarily have to be this cookie cutter thing that's gonna 0:09:28.240 --> 0:09:30.439 look the exact same from one person to the next. 0:09:30.880 --> 0:09:32.920 We control our futures, We control what we spend our 0:09:32.960 --> 0:09:35.720 money on. And additionally, on the note of happiness, I 0:09:35.720 --> 0:09:37.800 think it's worth pointing out how I think we've all 0:09:37.840 --> 0:09:40.720 seen in our lives when consumer spending, when you know, 0:09:40.840 --> 0:09:43.719 spending money that we didn't need to spend, how oftentimes 0:09:43.760 --> 0:09:46.000 that leads to us being less happy. And so that's 0:09:46.000 --> 0:09:48.359 even more reason why it's important for us to rethink 0:09:48.440 --> 0:09:50.360 what it is that moves the needle for us that 0:09:50.360 --> 0:09:53.160 actually makes us happy, because it'll be easier to identify 0:09:53.280 --> 0:09:55.680 the fact that earning lots of money and having tons 0:09:55.679 --> 0:09:58.560 of money isn't necessarily the end goal. Yeah, that reminds 0:09:58.559 --> 0:10:00.000 me of an episode we did quite a while back. 0:10:00.120 --> 0:10:02.880 We talked about buying happiness and can we do it? 0:10:03.080 --> 0:10:06.439 And we talked about the hedonic treadmill in that podcast episode, 0:10:06.480 --> 0:10:08.679 and we talked about how quickly we get used to 0:10:09.000 --> 0:10:11.240 the new normal once we've kind of upped our spending, 0:10:11.480 --> 0:10:14.240 and that spending increase might produce some sort of incredibly 0:10:14.240 --> 0:10:17.040 short lived burst of happiness, but in the long run, 0:10:17.360 --> 0:10:20.680 we then have to maintain that level of happiness and 0:10:20.760 --> 0:10:23.360 continue to spend. And so we're better off from a 0:10:23.400 --> 0:10:27.480 happiness perspective reining in our spending and saving more of 0:10:27.520 --> 0:10:31.199 what we make feeling less anxiety overall, and just practicing 0:10:31.240 --> 0:10:34.079 gratitude more frequently for for the things that we do have. Right, 0:10:34.160 --> 0:10:36.400 and as folks start to consider whether or not they 0:10:36.400 --> 0:10:39.040 think fire is something that they could live with, right, 0:10:39.080 --> 0:10:41.120 whether they think that that's something that would fit well 0:10:41.120 --> 0:10:43.480 with their lifestyle. I mean, that's exactly what we would 0:10:43.520 --> 0:10:45.800 encourage folks to do, is to think through the type 0:10:45.800 --> 0:10:47.760 of lifestyle that they want to have, because there are, 0:10:47.880 --> 0:10:49.640 you know, there can be a couple of different types 0:10:49.880 --> 0:10:52.840 of fire that you can achieve. You know, sacrifices will 0:10:52.880 --> 0:10:55.959 of course be required in order to go hard after fire, 0:10:56.000 --> 0:11:00.160 but how much sacrifice and the level of journey difficulty well, 0:11:00.200 --> 0:11:02.960 in large part be determined by the specific route that 0:11:03.000 --> 0:11:05.400 you opt for. In recent years is more people have 0:11:05.440 --> 0:11:09.440 found out about fire and joined the community. Terminology has 0:11:09.480 --> 0:11:12.800 developed to better reflect the choices that people are making, 0:11:12.880 --> 0:11:15.360 and that's where the different types of fire come in. Yeah, 0:11:15.360 --> 0:11:18.319 I think those are helpful because they've kind of distinguished 0:11:18.720 --> 0:11:22.680 uh different ways of approaching fire in your life. And 0:11:22.720 --> 0:11:25.240 the big two matt that that fire people talk about 0:11:25.240 --> 0:11:27.600 the most are lean fire and fat fire. So let's 0:11:27.640 --> 0:11:30.000 kind of talk about that too, because I think knowing 0:11:30.040 --> 0:11:32.480 these options out there too can help you in your 0:11:32.480 --> 0:11:37.120 approach to fire because some people want an incredibly simple lifestyle. 0:11:37.200 --> 0:11:39.559 They might, let's say, want to live in an RV 0:11:40.200 --> 0:11:43.559 um or build a tiny house on on a relatives land. 0:11:43.960 --> 0:11:47.240 And that kind of person might be somebody who would 0:11:47.240 --> 0:11:49.520 be a perfect fit for lean fire. This is a 0:11:49.559 --> 0:11:51.880 group of people in the movement that feel comfortable saving 0:11:51.960 --> 0:11:54.760 up twenty five times or expenses in investments and calling 0:11:54.760 --> 0:11:57.800 it done or maybe even less sometimes, and this group 0:11:57.840 --> 0:12:00.880 often receives the most criticism to because as most financial 0:12:00.920 --> 0:12:03.640 experts don't think they're saving enough to cover a long 0:12:03.720 --> 0:12:07.600 term retirement, lean fire often means only biking, no car 0:12:07.640 --> 0:12:10.200 at all. It also could mean moving to an extremely 0:12:10.240 --> 0:12:12.840 low cost of living area to reduce costs even more 0:12:13.280 --> 0:12:15.440 like living in an RV and this of course will 0:12:15.440 --> 0:12:18.240 allow you to reach that fire goal sooner because you 0:12:18.320 --> 0:12:21.240 have fewer expenses that you need to cover in those 0:12:21.280 --> 0:12:23.920 retirement years, in the years that you decide not to work. 0:12:24.240 --> 0:12:27.600 But no, that lean fire means a long term lifestyle 0:12:27.640 --> 0:12:30.280 of extreme simplicity. And I know for some people that 0:12:30.400 --> 0:12:33.360 sounds perfect and for other people we feel like we 0:12:33.400 --> 0:12:35.920 need a few more creature comforts and that lean fire 0:12:35.960 --> 0:12:37.840 lifestyle just isn't for us. Yeah, And on the other 0:12:37.960 --> 0:12:40.319 end of the spectrum is fat fire And I can 0:12:40.360 --> 0:12:43.360 identify maybe a little more with the fat firefolks, uh, 0:12:43.440 --> 0:12:46.760 for multiple reasons, namely because there's certain luxuries I'm gonna 0:12:46.760 --> 0:12:49.480 want to have in my life, like beer. That's true. 0:12:49.800 --> 0:12:51.280 You know, this approach is going to be a little 0:12:51.320 --> 0:12:54.280 more conservative when it comes to their investments and what 0:12:54.400 --> 0:12:57.800 you expect to receive and returns. And you know, while 0:12:57.800 --> 0:13:01.440 it major ly does prioritize frugality, also doesn't advise cutting 0:13:01.440 --> 0:13:04.400 back to the bare bones during retirement. You know, there's 0:13:04.400 --> 0:13:06.640 a realization that cutting back too harshly can lead to 0:13:06.679 --> 0:13:09.680 burnout and so where retirement may not even be all 0:13:09.679 --> 0:13:11.640 that fun, right, And so you've kind of worked really 0:13:11.720 --> 0:13:14.080 hard to save up, you know, just enough to to 0:13:14.120 --> 0:13:16.840 get by to consider that twenty five times your annual expenses, 0:13:17.040 --> 0:13:19.400 but in reality you're having to cut back maybe way 0:13:19.400 --> 0:13:21.520 more than you realize, or maybe there are certain expenses 0:13:21.760 --> 0:13:24.400 that you didn't take into account. And it's like, man, 0:13:24.480 --> 0:13:26.880 this retirement lifestyle isn't really all that is cracked up 0:13:26.880 --> 0:13:29.000 to be. Yes, So I would say you and I 0:13:29.160 --> 0:13:31.760 both probably lean a little more towards the fat fire camp, 0:13:31.920 --> 0:13:33.520 although a lot of those people want to buy like 0:13:33.559 --> 0:13:35.720 a Tesla and travel first class too, And I'm not 0:13:35.760 --> 0:13:37.600 really I don't really care too much about those things, 0:13:37.720 --> 0:13:39.920 or one of those things. You still want to tesla, 0:13:39.960 --> 0:13:43.920 I'm sure someday, someday, but but that's a long way off, man, 0:13:43.960 --> 0:13:46.719 I just can't see that happening anytime soon. Maybe in 0:13:46.760 --> 0:13:48.760 ten years I'll get an extremely used Tesla. We'll see. 0:13:48.920 --> 0:13:50.679 But now, Matt, as we're following the simple steps to 0:13:50.720 --> 0:13:53.160 achieve fire. We've we've changed our relationship with money, and 0:13:53.200 --> 0:13:55.719 we've kind of determined what fire approach is going to 0:13:55.800 --> 0:13:58.800 work best for kind of our long term approach to money. 0:13:59.040 --> 0:14:01.880 Then let's get too kind of a few specifics on 0:14:01.920 --> 0:14:04.240 how you proceed from there. One is that you have 0:14:04.320 --> 0:14:06.120 to pay off debt if you want to achieve fire, 0:14:06.160 --> 0:14:08.080 if you want to be able to retire. It is 0:14:08.160 --> 0:14:11.240 about saving and investing, but it's also about making sure 0:14:11.320 --> 0:14:13.880 that any sort of debts that you have, especially high 0:14:13.920 --> 0:14:16.520 interest rate debts, are taken care of. And so if 0:14:16.559 --> 0:14:19.280 you have gotten yourself into a place where you have 0:14:19.360 --> 0:14:21.240 more debt in your life, you've got student loan debt 0:14:21.280 --> 0:14:24.400 or credit cards hanging out, you're gonna want to prioritize 0:14:24.440 --> 0:14:28.160 those at the same time you're you're prioritizing investing and 0:14:28.200 --> 0:14:31.600 saving more because if you're going to try to retire early, 0:14:31.880 --> 0:14:34.440 the only debt you should typically even consider having in 0:14:34.480 --> 0:14:36.920 your life is debt on a home. Yeah, it's hard 0:14:36.960 --> 0:14:39.760 to save up your money and have interest working for 0:14:39.960 --> 0:14:42.240 you when you have interest working against you. When it 0:14:42.240 --> 0:14:44.720 comes to the debts that you still have. Another sort 0:14:44.760 --> 0:14:46.800 of you know, key principle joal when it comes to 0:14:46.920 --> 0:14:49.040 achieving fire is that you need to find ways to 0:14:49.160 --> 0:14:53.040 pair back your budget. Cutting your spending is so incredibly powerful. 0:14:53.080 --> 0:14:55.520 You know, we're all about earning more money, but getting 0:14:55.560 --> 0:14:59.600 intentional about spending less can be even more helpful. That's 0:14:59.640 --> 0:15:02.760 because less outgoing money will allow you to save more now, 0:15:03.160 --> 0:15:05.680 but it will also allow you to permanently decrease the 0:15:05.680 --> 0:15:08.120 amount of money that you'll someday need to fund your lifestyle. 0:15:08.360 --> 0:15:10.440 It's kind of like a double weym right. It helps 0:15:10.440 --> 0:15:12.120 out on the front end while you're saving up that 0:15:12.160 --> 0:15:14.440 money now, but it also helps on the back end 0:15:14.480 --> 0:15:17.760 to make sure that you spend that money judiciously as well. 0:15:18.200 --> 0:15:20.560 That being said, as you do earn more, it's crucial 0:15:20.680 --> 0:15:23.360 to bank your additional income, and we would encourage you 0:15:23.400 --> 0:15:25.880 as well to try to keep your lifestyle creep at bay. 0:15:25.920 --> 0:15:28.480 In order to achieve fire faster. You want to make 0:15:28.480 --> 0:15:32.120 sure that you minimize that lifestyle inflation. Yeah, lifestyle creep. 0:15:32.160 --> 0:15:33.960 It's one of my favorite terms in personal finance that 0:15:34.000 --> 0:15:35.680 doesn't get talked about enough. And when it comes to 0:15:35.720 --> 0:15:37.240 our money, I think all of us kind of identify. 0:15:37.320 --> 0:15:40.800 It's almost never that enormous purchase or that really stupid 0:15:40.800 --> 0:15:42.800 thing that we shouldn't have done buy in like a 0:15:42.880 --> 0:15:44.680 lake house when we didn't have the money for it. 0:15:44.880 --> 0:15:47.600 Oftentimes it's so small things that add up over time, 0:15:47.800 --> 0:15:50.240 hiring along service. Maybe for most of us, it's the 0:15:50.320 --> 0:15:53.360 small things that tend to ruin our budget, that lifestyle inflation. 0:15:53.440 --> 0:15:55.560 As we make more, instead of banking it, we tend 0:15:55.560 --> 0:15:57.160 to consume it, we tend to spend it. And so 0:15:57.200 --> 0:15:59.640 while that's one major thing we need to avoid if 0:15:59.680 --> 0:16:02.480 we're attempting to achieve fire, I think another thing, Matt, 0:16:02.520 --> 0:16:05.760 is that we have to massively lower our costs on 0:16:05.840 --> 0:16:09.040 the three biggest areas of our budget. And those are housing, transportation, 0:16:09.040 --> 0:16:11.840 and food. Firefolks tend to to house hack or live 0:16:11.840 --> 0:16:15.240 in much smaller accommodations than most people who earn similar salaries. 0:16:15.400 --> 0:16:17.640 Living close to where they work and not having a 0:16:17.640 --> 0:16:20.120 car is a route that many take right and eating 0:16:20.120 --> 0:16:23.880 out minimally while cooking almost exclusively at home is another 0:16:23.920 --> 0:16:27.440 way to save big. Almost anybody who has been pursuing 0:16:27.480 --> 0:16:30.320 fire for any period of time realizes that those are 0:16:30.320 --> 0:16:32.880 the major levels that they can pull right now in 0:16:32.960 --> 0:16:35.920 order to to massively increase their savings. Right if you 0:16:36.000 --> 0:16:38.480 go from a three bedroom house that you're renting to 0:16:38.880 --> 0:16:41.480 a one bedroom apartment, well, you can save a good 0:16:41.480 --> 0:16:43.480 bit of money every month. And likewise, if you're like 0:16:43.640 --> 0:16:46.960 leasing a car, let's say, or your cars worth dollars 0:16:47.000 --> 0:16:49.760 and you can downsize into a car that costs you 0:16:49.840 --> 0:16:52.000 five or six thousand dollars. Those are the kind of 0:16:52.000 --> 0:16:55.640 things that anybody pursuing fire would say those three areas. 0:16:55.800 --> 0:16:59.000 You can easily extract more savings out of all three, 0:16:59.200 --> 0:17:00.400 And if you do that, it's going to make a 0:17:00.400 --> 0:17:02.200 big difference in your budget and a big difference on 0:17:02.480 --> 0:17:05.840 your timeline to being able to reach that early retirement point. Yeah, 0:17:05.880 --> 0:17:08.360 focusing on those huge expenses can really make a big 0:17:08.400 --> 0:17:10.680 impact right there. There's so many little things that we 0:17:10.680 --> 0:17:13.200 can do in our lives to kind of optimize, uh, 0:17:13.240 --> 0:17:15.560 these small little winds, but you've got to start with 0:17:15.600 --> 0:17:17.240 the big things. There's only so much money that you're 0:17:17.240 --> 0:17:19.520 gonna be able to save by tweaking your thermostat a 0:17:19.560 --> 0:17:22.680 little bit or searching online for like promo codes when 0:17:22.680 --> 0:17:25.000 you're getting ready to buy something, or for a parking lot. 0:17:25.560 --> 0:17:27.640 You can save ten bucks, you know, for a one 0:17:27.640 --> 0:17:29.960 time parking fee. And granted that's not something that you 0:17:29.960 --> 0:17:32.080 should avoid, but it's also not gonna be the big 0:17:32.080 --> 0:17:34.919 difference maker exactly. And so so something else too. We 0:17:34.920 --> 0:17:37.000 certainly want to make sure that folks are saving their money, 0:17:37.080 --> 0:17:40.240 but we want them to be investing even more. Uh. 0:17:40.280 --> 0:17:43.320 You know, we've talked about the pittance that most savings accounts, 0:17:43.480 --> 0:17:45.960 even the ones that you know are our favorite online banks, 0:17:46.000 --> 0:17:48.760 that they're paying these days. It is not very high. Uh. 0:17:48.800 --> 0:17:51.080 And if you want your money to grow quickly, it's 0:17:51.119 --> 0:17:53.200 going to need to. If you want to achieve fire, 0:17:53.600 --> 0:17:56.600 then you're gonna need to invest a substantial portion of 0:17:56.600 --> 0:17:58.879 what you make. So let's do a little math, including 0:17:58.920 --> 0:18:02.160 some of the specifics on how to invest to achieve fire, 0:18:02.440 --> 0:18:04.520 you know, including you know, the pesky question of of 0:18:04.560 --> 0:18:07.560 how to even draw on funds in your retirement accounts 0:18:07.720 --> 0:18:09.919 before you hit retirement age. And we're gonna get to 0:18:09.960 --> 0:18:22.080 all those topics right after the break. All right, Matt, 0:18:22.080 --> 0:18:23.960