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It happens to everyone. We get a gift and we just don’t like it or need it. Sometimes we’re with the person and have to accept it and feign enthusiasm uncomfortably. It’s painful, we know. But when you get a gift you don’t want, don’t let it clutter your life. Try to put it to good use by making someone else happy or by exchanging it for something you do like.How to handle unwanted giftsSometimes you just don’t like or want the gift, and that’s ok.In almost every case, the gifter struggles with what to get you and just wants you to know they are thinking of you.If you returned it or regifted it, and the original gifter asks how you are enjoying it, just lie. It’s ok.Sell your gift cards! Check out Raise.com to sell yours. And also, check out what’s for sale.And here’s a tip for future years: tell your friends and families what you want or don’t want. Set limits and boundaries to ensure you don’t get stuck with unwanted gifts in the future.Because the holidays are in a big part for kids and toys, and because those toys can be of terrible quality, we know they make break. Sometimes immediately. What happens when you buy your kid a toy and it breaks Christmas morning?How to handle broken GiftsReturn to the retailerThe person at the counter doesn’t care about you. Don’t invent an elaborate story. Just walk up and tell them you’d like to return it.Return to the manufacturerThis information is usually hidden deep inside websites, but it’s there. Sometimes, the manufacturers prefer you contact them before going to the retailer because it’s more cost-effective.File a claim with your credit cardMany credit cards offer insurance for damaged items. It doesn’t matter if it’s your fault!The filing process can be a bit tedious, and that’s by design. Stick with it, though, and you will likely get a statement credit for that item.Top 3 takeaways:It’s ok to not like all your gifts. Don’t hold onto something you don’t want.When a gift breaks, don’t give in. Get a refund or exchange.It is the thought that counts, so consider doing fewer physical gifts for your loved ones and find interesting ways to show them you care.--Show references:Raise.com#043 | Know and use your credit card benefits--Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.orgfriends on FIRE etsy store---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

Mike has shared before that his dad retired in his early 40s, and this lifestyle approach inspired Mike’s FIRE journey at a young age.  Maggie has been trying to get Mike’s dad on the show for a while, and we finally succeeded when Mark and Jack invited themselves on the show.  In this discussion with Jack and Mark, we cover many topics, including:Jack and Mark met at work, just like Mike and Maggie!They found a common interest in saving enough money so they could jump out whenever they wanted to.Jack and Mark nicknamed themselves the Pros of Dover.How they each grew up and what it taught them about money.The importance of values and how they learned early on they had the same values.A Franklin planner influenced parts of Jack’s life and journey.Jack read this book at 28, which inspired him on this journey:  Cashing in on the American Dream: How to Retire at 35.  He would not recommend this book today though!Two books that Mark found inspiring: Rich Dad, Poor Dad and The Millionaire Next Door.  Avoiding lifestyle inflation and keeping up with the Joneses.Accumulating money is buying yourself options for later in your life.  It’s all about accumulating a big next egg so you can have options when you leave work.  At a young age, Jack realized that he had all of these other personal goals he wanted to pursue in life, outside of work.  Fairly early on, Jack got his company to agree he could take summers off to travel with his kids.  He structured his job around what he wanted, and he wasn’t afraid to ask for what he wanted.  He decided to keep making money as long as possible until it wasn’t fun anymore.  When he decided not to take a job when his company was moving and instead retire early to spend time with his family, he got a letter from the CEO praising his decision.  The importance of being in sync with your partner on values.The bureaucracy and stress of some jobs can become all-consuming.  Being on call 24/7 with the advance of new technology and how disruptive it can be.  Keeping in mind what you’re at work for and why you’re doing it.  Jack’s love of log paper.  We think this is basically graph paper, but we’re still not entirely sure.  Mark still has one of their projection net worth curves from 1995!  Jack doesn’t think math is Mike’s thing.  Maggie was shocked by this statement!  If performance is measured, performance improves!If you just continue to save a lot of money and do it at a consistent rate, you’ll get there.Jack always treated saving money as a hobby.  Trying to keep the same spending level year over year became a fun challenge for him.Value-based thinking eliminates a lot of remorse.  Regrets are difficult as you don’t know what the alternative future would have been.  The problem that Jack sees with people who want to retire early is that they don’t have a clear plan on what they are going to do post-retirement.  Have a plan and vision for how you spend your life!---Show ReferencesBook: Cashing in on the American Dream: How to Retire at 35 (they don’t recommend!)Book: Rich dad poor dadBook: The millionaire next door---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.orgfriends on FIRE etsy store---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book:  Your New Relationship with Money

It’s hard to remember all the things you need to do throughout the year, so having a checklist really helps.  This is comparable to a home maintenance checklist for your house.  It’s hard to remember you need to change your air filter in November and cut the ivy off the trees a few times a year.  If you have a checklist, you’re on a much better path to accomplish your goals for the year.  We’ve created a starter checklist to then take and customize for your personal needs and goals.  Download the checklist, remove the things that don’t apply to you, add additional unique custom items that apply to you and we would never know, and then manage and track your progress throughout the year.  Remember, what gets measured gets better!We talk through this checklist at a high level and share some thought-starters and recommendations on each of the items on it. Most of the items are self-explanatory, but we also share which podcast episodes could be helpful if you need additional details and inspiration.  The sections of the 2021 financial checklist include:Financial Management and OrganizationRetirement SavingsSavings and InvestmentsDebt PayoffEmployer BenefitsCutting ExpensesCredit and Credit Card ManagementWills and Estate ManagementTaxesGiving and Giving AwayTop 3 takeaways:Download and use this checklist, it’s helpful.Make the important financial responsibilities part of your routine. When they become habitual, it won’t seem like work.Keep at it and celebrate your successes throughout the year.---Show ReferencesTemplate for $3 at friends on FIRE etsy store - 2021 Financial Checklist2021 financial tracker available on friends on FIRE website  for free---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.orgfriends on FIRE etsy store---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money 

We start with a bit of reflection. What a year it has been! There have certainly been ups and downs, both personally and professionally, but as a team, friends on FIRE has had it’s best, and only, year ever!We aired 75+ episodes.We reached 35K downloads.We were a finalist for a Plutus award.We made a ton of great friends in our interviews.We had fun together.We had a positive impact on people’s lives.For our main topic to close out the year, we revisit the importance of goal setting:The importance of setting goalsRun your life like a company.What gets measured gets improved.Only when you track and measure results can you adjust and improve.Managing goals in a changing environment like CovidThings outside your control change all the time. You need to figure out if your goals need to change or you just need to persevere.Goals help get you through challenging times. They keep you focused and motivated.SMART goals: Specific, Measurable, Assignable, Realistic, Time-relatedTalk about and align goals with your spouse or partnerNeed them on boardGetting them on board when they different with money is another episodeBut if they are not on board, don’t use your spouse as an excuse.  You control what you do.  Start with yourself and set the example.  Common goals with friendsAccountabilityFunTrack them!We encourage everyone also to take some time to step back and consider more qualitative progress in 2020.  Take some time to reflect on this past year, note some highs and lows, and capture the standout moments.  Some ideas for capturing those moments are:Go back and look at your calendar to trigger memories and moments.Look at your photo reel on your phone, google photos, or wherever you archive your photos.   Take a scroll through your notes or journals if you keep one.  We each share our standout moments in 2020.  We wrap up this episode by sharing our 2021 goals.  Top 3 takeaways:Goal setting is the most important first step to making changes in your life.Make your goals SMART.Take a few minutes to reflect on 2020, especially the qualitative highs and lows. ---Show Referencesfriends on FIRE etsy store---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.orgfriends on FIRE etsy store

In this discussion we Tom we cover a number of topics, including:Tom has been a teacher in Chicago public schools for 25 years.He grew up in a middle class household, but he never really learned how money worked as a child.  They did not talk about money a lot.  When they couldn’t afford something, they just didn’t buy things.  They didn’t talk about investing or how money can work for you.  He was told to find a job with a good pension to take care of him.  He didn’t realize how money works until his mid-40s.He eventually noticed he wasn’t really paying attention and he was spending all that he was earning.  They had racked up credit card bills and were living paycheck to paycheck.  They were leasing cars, using raises to buy more stuff, and one day they just got fed up with things.Lifestyle creep.  They were aware of the pain of not being able to keep up and not do as much as their friends and family members are doing as their...embarrassment from falling into debt.  One of the first times he was really aware was one summer when he didn’t have enough money to make it through the summer when he’s not receiving a paycheck as a teacher.Major turning point.. He was miserable and he didn’t know why.  They felt out of control.  They were counting on these future raises, but the lifestyle creep was killing them.  He started watching all of these youtube videos and reading books and learned so much about better ways of managing their finances and living.  Turning their finances around has improved their relationship and happiness levels.  The best part is that they are communicating more, setting goals together,etc.  They learned about zero-based budgeting and attached their budget with a vengeance.  Within 3 years, he went from barely $300 left in their budget each month to $43K in cash, all of their debt paid off except for mortgages, and drastically changing their approach and relationship with money.  Some of the ways they cut back include cutting back XM radio, magazine subscriptions, and changing SUV leases to more affordable cars.  Tom has one rental property, and he shares how not to get into the rental property market.  He would not recommend his approach to others, but it’s worked out OK for him in the end. Tom has read a lot of books, and his favorite recommendations are in the show links below.Tom shows that you can live within your means and achieve financial freedom on a teacher’s salary.  It reminds us that having your finances in order is achievable at most salary levels.  Tom believes you can better control your finances if you just take the time to learn this stuff.  Tom shares some of the work he’s doing to improve transparency in the 403-B programs offered to teachers in his area.  Tom shares what he is now teaching his kids about money.  ---Show ReferencesTom’s blog: Whatthefi.comTom on instagram: @whatthefiguyBook: Rich Dad Poor Dad: What the Rich Teach their Kids About MoneyBook: Dave Ramsey - Total Money Makeover - a kick in the butt to attack debt, focused on the baby stepsBook: The Barefoot Investor: The Only Money Guide You'll Ever NeedBook: The Book on Investing In Real Estate with No (and Low) Money Down: Creative Strategies for Investing in Real Estate Using Other People's MoneyBook: The Simple Path to Wealth: Your road map to financial independence and a rich, free lifeBook: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in SchoolBook: Retire before mom and dad  Book: The Psychology of Money: Timeless Lessons on Wealth, Greed, and HappinessBigger Pockets Website + PodcastStockpile app he uses with his kids---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We are joined by one of Maggie’s best childhood and adult friends, Erica.  Erica has been curious about values-based investing for years, and when she posed several questions to Maggie we thought it’d be fun to bring her on this podcast for the discussion.  What is values-based spending?You may see a lot of different definitions of this out there.  To us, values-based spending or values-based budgeting is the idea of spending your money in alignment with your values and priorities.  To do this, you need to be clear about what matters to you.  And if everything matters, then nothing matters.  Prioritize what matters to you and what you care about.  Set up your budget and spending practices in those areas, and reduce your spending in other areas.  Our thoughts on values-based spending:It’s important!  Everyone should do it.  We do it.  This is why tracking your expenses matters.  If you don’t know where your money is going, you can’t put in the work to align it to your values.  Do you value travel?  Great, then it’s OK to spend more money on travel.  Do you value fast food and random crap from Target?  Cool, well then quit spending money on fast food and random crap from Target.Budgeting vs. Tracking Expenses episode reminder.  Tie values into either approach.  What is values-based investing?We define values-based investing as making financial investment choices based on your personal values and views, vs. just a company’s performance.  This could mean looking at a company’s product, actions, or leaders and seeing if they align with your values.There are company’s you believe have a positive impact on the world, from our culture to society to the environment.  There could be company’s you think are indifferent and company’s who are doing damage.  Values could include your faith, health practices (e.g. we’re vegan and don’t want to support the meat industry), climate change, environmental policies, human rights, diversity/inclusion, etc.  Values-based investing could mean screening more things in, screening things out, or both.  Most banks or trading firms will offer recommendation or lenses on this that you can research more:Betterment markets some of their funds as “With our new and improved Socially Responsible Investing Portfolios, you don't have to choose between investing in companies whose values align with yours and your performance goals.”Fidelity will let me screen ETFs for various factors, and one is a socially responsible screen.  There are 101 ETFs across multiple categories I can drill-down into.   Other funds include: NACP, SHE, and WOMN.  When we researched these funds and looked at the individual stocks within them, they look very similar to top S&P 500 firms.  Judge for yourself, but we think you’ll be surprised to see what’s in these funds and the how low the bar is set of what makes it in to the fund.  Vanguard ESG US Stock ETF (ESGV): screened for certain environmental, social, and corporate governance (ESG) criteria.  Invesco Solar ETF (TAN): First Solar (FSLR) and SolarEdge Technologies (SEDG), TAN is a way to invest in the solar energy trend without going all-in on a single companyOur thoughts on values-based spending:It’s important to understand how investing actually works, before you start to tie your values to it.  A company exists to create value for its shareholders.  Everything in life is a trade-off, and so is values-based investing.  You’re trading off profit vs. you feeling good about something.  That’s a personal decision.  Diversification is always an important consideration.  It’s not an OR thing, it’s an AND thing.  Perhaps I want to start moving more of my money into the company’s who’s mission and beliefs I align with.  I buy so few individual stocks this is less applicable at times.  I want to invest my money in a location that’s going to perform decently and not ruin the world.   It’s all about continuums and scales (e.g. I won’t do this as it’s so far against my values, but I will invest my money in broad ETFs that contain facebook and amazon stock). Read the fine print.  Some things will be marketed to you as if they are socially responsible, but dig into the details.  See what companies are in the ETFs and read what their requirements are and how they hold companies within accountable.  Top 3 Takeaways:When you buy shares of stocks it doesn’t go to that company directly, it goes to the other investors.Erica’s dad might be right, altruism and investing don’t always mix.  You can invest and make money, and also be altruistic.  They may be separate activities, but you can do both things.  You need to understand that if you are receiving a message about something from a company (for profit or non-profit), someone is marketing to you.  You need to be skeptical and do your own research.  ---Show ReferencesBook: The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically by Peter SingerGive Well Charity Navigator---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

Maggie first met John O when she saw him speak at Plywood People, a nonprofit in Atlanta leading a community of startups doing good.  John spoke about how hope can make all the difference, and hopelessness can destroy communities.    We discuss many topics with John Onwuchekwa:John first and foremost describes himself as a husband and father.How a lot of people come into disenfranchised communities and take but don’t give.  John’s early years and what it taught him about money. John is the son of two Nigerian immigrants.  His parents were hard-working and frugal.  He then had friends who mentored him at a young age about money and budgeting.  They taught him to know where every cent goes.  A lot of people think it’s about the amount of money you have versus your attitude about money.  Most people think they have money problems, but really they have insecurity problems.  And money just becomes a tool for chasing approval from people. Logic isn’t what drives people. What drives us are our loves.  Until you find a security that’s more stable than money, you’ll constantly be in the same place.Start with the attitudes and what drives you.  Your values!  As his church, they require premarital counseling and financial counseling is one of their modules.  The history of coffee.  It involves a goat.  John realized coffee was an area of injustice.  John rode MARTA, Atlanta’s public transportation system, to observe the city and it’s trends.  The coffee supply chain is like watching the MARTA line drive north.  He observed that it starts heavily black on the southside of Atlanta, and turns more white as you go north.  Black people are getting off the train before it gets to some of the city’s most prosperous areas.  Coffee is the same in that it is often grown in and comes from historically black areas, but then it turns more white throughout the supply chain as it gets to an end customer.  He learned from Willie Jennings that geography is never an accident.  Those observations that you make aren’t incidental, they are very intentional.A more intentional pivoting for people to move into disenfranchised communities and invest in it.In 2020 when covid first hit the US, he heard Andy Crouch talking about how this was the ice age and we needed to pivot how we did business.  He took this advice early on and pivoted how Portrait coffee started.  It’s proven to be an incredibly successful approach.  Everyone’s story has a sense of luck, as in the right place at the right time.  Luck favors the prepared.The Black Lives Matter protests this summer, and how people were forced to sit back and understand the importance of Willingness to help without the requisite wisdom to know what to do always leads to a disaster.  Willingness met with wisdom.  John has found that there are a lot of people that are willing to help, but willingness to help without the requisite wisdom to know what to do always leads to disaster.  Willingness needs to be met with wisdom. Things are complex and we need to processThe importance of learning.  John shares his top three recommended books for those who want to learn and educate themselves on systemic racism better.  The book names are in the show notes below.Reading history as written from the perspective of the people that were shafted, and realizing that the problem that we see goes deeper than what we thought that it was, so charity can’t be the way that we solve such a complex problem.Part of what makes offering solutions before people have done the work to understand the nature of the problem is that even saying what you say in the solution can be misinterpreted if they don’t have the schema to place it in.  If people don’t know what has led to the nature of the problem, then we can’t start to solve it. The importance of buying from black owned or minority businesses and entrepreneurs.  People don’t know all that’s gone into it, so it can seem like this blanket affirmative action.  It seems discriminatory and miniscule at times.  It’s small like an acorn is small.  Acorns start off small, but they can become oak trees. Your actual dollars on where you spend them matter like acorns planted in the ground matter.People have to learn.  “A problem well-defined is a problem half solved.” - John DeweyPeople often don’t want to really understand the nature of the problem.The people who have done the most significant work are the people that have spent the most time understanding the nature of the problem. By the time they dive deep and see how far things go, they’ve got a million action items they can take.  They aren’t spending as much time saying what can I do.  Step 1 - Learn.  Step 2 - Use your dollars wisely to support minority businesses.  Step 3 - Learn some more.John’s podcast, launched in 2020, is called four in the morning.  To him, getting up at 4am is an act of hopeful defiance.  Each day he is reminded that just because it’s dark outside, it doesn’t mean that it’s not morning.  The sun doesn’t have to be shining for it to be a new day.  He just wants to get up and wait for your circumstances to catch up.  The sun is eventually going to rise.  You have the choice to rise up and inspire other people to hope. ---Show ReferencesPortrait CoffeePortrait Coffee video - explains Marta reference in more depth.John’s Four in the morning podcastAndy Crouch articleBook: The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa BaradaranBook: Democracy in Black: How Race Still Enslaves the American Soul by Eddie S. Glaude Jr.Book: When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America by Ira KatznelsonBook: Me and White Supremacy: Combat Racism, Change the World, and Become a Good Ancestor by Layla SaadPlywood People---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

It took Mike about 2 weeks to read Tools of Titans by Tim Ferriss.  It took Maggie about 48 weeks to read Tools of Titans.  In Maggie’s defense, it was 647 pages and 2020 was a doozie of a year and it threw a lot of interruptions her way.  Either way, in the end, they both read it.  And Maggie used her 48 weeks to take better notes on it than Mike did.  Our top money-related insights and lessons from Tools of Titans:Stuff and how it won’t make you happy.  More broadly, happiness and money.  Derek Sivers quote on a billboard, “It won’t make you happy,” to be placed outside of shopping malls and car dealerships.Naval Ravikant said, “The most important trick to be happy is to realize that happiness is a choice that you make and a skill that you develop.  You choose to be happy, and then you work at it.  It’s just like building muscles.”  He then went on to say, “In any situation in life, you only have three options. You always have three options. You can change it, you can accept it, or you can leave it. What is not a good option is to sit around wishing you would change it but not changing it, wishing you would leave it but not leaving yet, and not accepting it. It’s that struggle, that inversion, that is responsible for most of our misery. The phrase that I probably use the most myself and my head is just one word:accept.”The role of money in your lifeThe idea of enough.  Our wants vs. needs episode.  Studies about how your happiness doesn’t increase after you have some basic level of money to take care of yourself.. after that more doesn’t buy happiness. It often does the opposite.  Money is a great servant but a terrible master. Knowing your target monthly income and ideal lifestyle cost. “What’s my real target monthly income. TMI. For the latter, in other words: how much does my dream life—the stuff I’m deferring for “retirement”—really cost if I pay on a monthly basis.”Why you, sometimes, spend money.  “Trying to get everyone to like you is a sign of mediocrity.” - Colin Powell“If you stop caring about what others think, you’ll magically start spending less money.”The chains money can put on you.  Be careful!“If you find yourself saying but I am making so much money” about a job or project, pay attention.  These are warning signs that you’re probably not on the right track.  “It is far better for a man to go wrong in freedom than to go right in chains.” - Thomas HuxleyFinancial freedomThere is a chapter titled “How to earn your freedom”.  It’s worth reading a few times.  “Instead our insane culture of fear, fashion, and monthly payments on things we don’t really need - we quarantine our travels to short, frenzied bursts.” In this way, as we throw our wealth at an abstract notion called, “lifestyle,” travel becomes just another accessory - a smooth-edged, encapsulated experience that we purchase in the same way as buying clothing or furniture.”The trend of vacations towards a “more simple life.”  “Purchasing a package vacation to find a simpler life is kind of like using a mirror to see what you look like when you aren’t looking in the mirror.”Naturalist Edwin Way Teale wrote in his 1956 book Autumn Across America…. “Freedom as John Muir knew it, with its wealth of time, it’s unregimented days, its latitude of choice… such freedom seems more rare, more difficult to attain, more remote with each new generation.”Thoreau said that we end up spending “the best part of one’s life earning money in order to enjoy a questionable liberty during the least valuable part of it.”  We’d love to drop all and explore the world outside, we tell ourselves, but the time never seems right. Thus, given an unlimited amount of choices, we make none. Settling into our lives, we get so obsessed with holding on to our domestic certainties that we forget why we desired them in the first place.“Thus, the question of how and when to start vagabonding is not really a question at all. Vagabonding starts now. Even if the practical reality of travel is still months or years away, vagabonding begins the moment you stop making excuses, start saving money, and begin to look at maps with the narcotic tingle of possibility.”  Vagabonding to me is a metaphor. Your goal may not be to vagabond, but the goal of financial freedom is the same thing. Top 3 Takeaways:Read inspiring books.  They are full of so much inspiration and learning.  It doesn’t cost money to learn new things.  We both checked out this book from the library.  There is no one single path to success or to fulfillment. Learn from others, test out their methods for yourself and when you find something that resonates, try it.  If it works for you, stick with it.---Show ReferencesBook - Tools of Titans by Tim FerrisBook - Designing Your Life: How to build a well-lived, joyful lifeArticle - How your salary and the way you spend money affect your happiness--Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We talk through what entitlement is, how it can be both good and bad, how it relates to your finances, how it can help you in your career, grow confidence, and more.  What is entitlement?  Entitlement is defined as the fact of having a right to something or the belief that one is inherently deserving of privileges or special treatment.  I think when most people hear the word entitlement, it comes with negative connotations.  People think of entitlement as a bad thing.  They picture trust-fund kids or people who don’t appreciate everything they have and take things for granted.  Yes, that’s one view of entitlement.  There is another angle on entitlement.  If we go back to the definition itself, it’s the belief that you deserve something or have the right to something.  Entitlement from this angle can be a good thing, though it is a fine and nuanced line.  The good side of entitlement is that when you’ve worked hard for something, you then grow confidence in yourself and your abilities, and you should feel entitled to certain things as a result.How does entitlement relate to your personal finances?  Your mindset is critical to reigning in your finances.You need to sharpen the good side of entitlement and dull the bad side of entitlement.  You need to work hard to make money.  It doesn’t come magically to the majority of people.  You need to work even harder to save your money.If you continuously feel entitled to things, you will not work hard enough, and you spend too much money and thus not save enough money.  You’ll feel like a victim and, as a result, won’t feel compelled to make changes that could result in progress.The bad side of entitlement and things to remind yourself:You are not entitled to have a specific type of job.  If you approach life this way, you’re less likely to save and live below your means.  You should prioritize an emergency fund so that if something suddenly happens to your job, you’re not stressed, and you can handle things financially.Entitlement can create a mindset of specific emotions and expectations that are hard to manage.  If you approach life constantly feeling entitled to certain things, you won’t work as hard for them, and you may constantly be disappointed.  Victim mentality.  Growth vs. fixed mindset.  Scarcity mindset.  The good side of entitlement and things to remind yourself:When you work hard for something, you deserve good things.  And often, those good things come in the way of money.  This doesn’t mean you get to spend all the money, or it defeats the purpose of you working so hard for it.  If you’ve saved up an emergency fund or are on a journey to financial independence, then you should feel entitled to feel good about what you’ve accomplished.  Entitlement can breed confidence, and confidence can bring happiness.  Be proud of what you’ve accomplished in life.  Top 3 Takeaways:Understand what entitlement is, and the good and bad side of it, and how it relates to your life.  Avoid the bad sides of entitlement.  Don’t ever take things for granted, and work hard for what you want in life.  Focus on the good side of entitlement.  If you’ve worked hard for something, then feel good when you’ve achieved it.  Take the confidence and pivot it into a purpose-led life.  ---Show ReferencesPlaying with FIRE bookPlaying with FIRE Documentary--Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

Black Friday is the day after Thanksgiving when stores and customers lose their minds, and a lot of mindless shopping ensues. The term Black Friday refers to the idea that stores sell so much that they are in the black, which means profit. In the red means a loss. Cyber Monday is a new idea but functions in the same way. And we can’t forget that Black Friday isn’t like a whole month of “sales” and such. It’s a big deal. Mike loves Black Friday because it’s a family event. For 15 years now, he and his sister would go out early on Friday and go shopping. Then with their spouses and then with their entire families. It’s about getting fancy Christmas coffees and Starbucks and just enjoying the decorations and perhaps some good sales. It’s never been solely about shopping.But there are some deals to be had, and here’s how you own them.8 Ways to Conquer Black Friday:Sign up for alerts at Blackfriday.com.Have a plan.  You don’t need to be fixed entirely on this, but say, for example, “I’m going to buy a jacket.”  And then enjoy picking your favorite jacket from the store you decided to shop at. Don’t just show up and say, “Oooh, nice jacket!”  This is like going grocery shopping without a list.  If you don’t have a plan, you’ll do a lot of mindless shopping and will buy too many things you don’t need and perhaps can’t afford.Go with family and friends.  Not only is it more fun, but you’ll have some accountability partners and people bugging you to “get moving,” which prevents you from lingering.That deal you see? It’s probably not a deal.  Know the tricks! Here are some common ones:Buying more than you otherwise would to save money. You’re in fact spending more.Buying now for future savings. You’re almost certainly going to forget.Familiarize yourself with the tactics, and for all of the purchases during the year that you don’t “need” immediately, just wait. Not only will you probably change your mind, but you’ll save on something you were going to buy anyway.Ignore doorbusters. It’s almost always some low-quality item designed to get you in the door and buy something else. Don’t buy a TV. You’ll be ok. Cheap TVs are always cheap for a reason.For commodity items, compare! If you want to buy a new Xbox game as Mike does, they are 100% the same and always the same price, so check Target, Walmart, Best Buy, etc., and then wherever you can save $5 or $10, that’s the place you buy!---Show ReferencesBlackfriday.com--Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book:  Your New Relationship with Money

We start by talking about what we each enjoy about the holidays: spending time with friends and family, and that work slows down a bit. Somehow the holidays have evolved into a time where people spend so much time and money shopping, and it’s not the spirit of the holidays. We urge everyone to reconsider how they are spending their money during the holidays and offer specific tips and suggestions on saving money this holiday season. Mike talks about hygge, and Maggie reminds people to talk to their friends about family about what’s important to them during the holidays.  We talk through six ways to save money this holiday season: Fancy photoshoots + holiday cards – Reconsider spending hundreds of dollars on fancy staged family photos shoots and then mailing paper cards to everyone you know. Instead:Consider taking a casual DIY approach to holiday photos, or explore using a photographer that is just starting out and charging cheaper rates.Consider digital cards instead of paper cards and stamps.Consider making a charitable donation, in honor of your friends and family, with all of the savings from your photos and cards.Wrapping Paper and wrapping accessories – Reconsider spending any money on this. Instead:Re-use and save wrapping from otherUse the inside of brown paper bags from the store. You can also draw on it to decorate the outside of the gift and get creative.Gifts – Reconsider buying tons of gifts for tons of people. Instead:Consider experiences over physical objects.Consider limiting the number of gifts you buy for your kids.Focus on gifts that people need (pajamas, new clothes, art supplies, etc.).Tell your family members you don’t want or need anything. Tell them what you’d rather have instead of physical objects. Consider making homemade and creative gifts using any special skills you have.Consider putting money into kid’s college funds instead of some gifts. Santa Pictures – Reconsider spending a bunch of money on Santa pictures. Instead:Consider finding a less expensive location or option. Look for a coupon or discount. Opt-out of this, especially if your kids are old enough and no longer believe in Santa. Holiday Décor – Reconsider spending a bunch of money on inside and outside décor. Instead:Consider how much holiday décor you need. You can enjoy decorating for the holiday and not have to spend much. A few decorative items or areas can be enough.  Save items from previous years and re-use them.Buy things while on sale at the end of the previous year’s holidays. Holiday Activities – Reconsider spending lots of money on holiday activities. Instead:Consider limiting the number of activities you do. It can cost $150-200 for a family of 5 at these activities. We will do one big activity each holiday season, but we limit it. Make your own fun and inexpensive traditions. For example, drive around, look at other people’s holiday lights while enjoying hot cocoa in the car, or plan a holiday-themed family game night. Ask grandparents or other family members to gift experiences instead of physical gifts. Find a place to volunteer and give back. Give Back – As you’re reconsidering how you spend the holidays, remember that this can be a crucial time of the year to give back to others in need. In addition to doing for good others, it also feels good for you and your family. Volunteering or find other ways to give back.  It can also be a great experience to teach your kids. Top 3 Takeaways:Remember what the holidays are all about. Spend some time thinking about what makes the holidays special for you. Track your spending and make a budget to be more aware of how much you are spending during the holidays. We recommend you do this all year, but it’s especially important during the holidays. Realize that you don’t need to spend a lot during the holidays to be happy. Avoid keeping up with the Joneses and lifestyle inflation.---Show ReferencesWhat is Hygge?---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

Before we get into the specifics, let’s do a recap of how investing works and why it’s critical to financial independence. Investing in the stock market is essentially buying pieces of companies. This is overly simplified, but you can buy an individual stock, so a share of Apple. You can buy a Mutual Fund, which is a bucket of investments managed by someone else. Or you can buy an ETF or Exchange Traded Fund, which is a piece of many individual stocks across the whole stock market, or industry, etc.The stock market is based on buying and selling, driven by what investors believe is a specific company’s future value. When there are more buyers than sellers, the price goes up. When there are more sellers, the price goes down.So when you buy into the stock market with companies that do well, your investment value goes up. There are always winners and losers, booms and busts, but the stock market’s history is that overall it increases by about 7% annually. And there’s this thing called compounding growth: If you make 10% on $100 in a year, that’s $10. But when you reinvest that $10, the next year, you earn 10% on $110, which is an additional $11. Over time, this is huge.The last thing is fees: ETFs and Mutual Funds charge fees, and these can add up over time just like compounding growth. It’s a compounding fee. So look for the expense ratio detail before you buy something. The recommendations we’ll get to are both low cost.Here are some warnings:Don’t try to time the marketDon’t gambleDon’t put all your money into a small set of investments.Here are the 5 easy steps:Apply online for a brokerage (Vanguard, Fidelity, Schwab, Trade, RobinHood)Deposit some cash, usually via ETFPick a broad ETF like Vanguard Total Stock Market ETF (VTI)Schwab U.S. Broad Market ETF (SCHB)Fidelity ZERO Total Market Index Fund (FZROZ)When your money arrives, go to “Trade”, select “Buy” and type in the ticker symbol.Complete your transaction by entering how many shares. Select the order type as “Market” and submit. We recommend also selected “reinvest dividends” to achieve that compounding growth.And if this is too much, check out Wealthfront or Betterment for an even simpler way to invest.Top 3 Takeaways:Don’t overthink it. But also don’t be too risky if you’re new.Get started today.  The earlier you get started, the better.  Continue to learn. This episode gets you over the hump, but you still need to know what you’re doing.---Show ReferencesCharles SchwabFidelityVanguardWealthfront---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We start with how we’ve both absentee voted and early votes, and share a reminder for everyone to get out there and vote!  We then discuss how excited Maggie is for this topic, and Maggie tells Mike how he feels about the wants vs. needs.  Our views on wants vs. needs have evolved over the years.  We share our combined 77+ years of wisdom on this topic.  The definition of wants and needs:A need is something you cannot live without.  A need is a shelter, food, water, some types of medicine or medical care, clothing, and other things you truly can’t live without.  And within these needs, there are levels and layers of what’s truly a need versus something you just want.  For example, some shelter, food, water, and clothing level is a need, but just a very basic level. The basics are clean water, rice and beans, some veggies, clothing that covers your body and keeps you warm, and a basic enough shelter over your head.  Everything beyond that is a want or a desire that you have.  Mike explains Maslow’s hierarchy of needs.  A want is something you desire to possess or do, but not something you need to live. There are wants within almost every category of real needs.  For example, you need to eat.  You want to eat fancy cheese, out at a restaurant, or take the kids out for ice cream.  You need to drink clean and safe water.  You want to drink bottled water, sparkling water, craft beer, or expensive wine.  The difference between wants and needs and why this matters:There is a fine line between wants and needs.  Being able to recognize that line can be the difference between you meeting your financial goals or not.  If you spend the time breaking down what is a want vs. a need in your life, you could have some aha moments about what you truly need and how you’re spending your money.  We are not suggesting you constantly deprive yourself.  We do suggest you appreciate and recognize the difference between wants and needs, and use that insight to influence better purchasing decisions and savings habits.  Escalating commitment is an important concept to understand.  It’s a human behavior pattern where you increasingly face negative outcomes from a decision or investment you’ve made instead of stopping and changing your course.  There are so many examples of escalating commitment with purchases.  It’s very similar to the idea of lifestyle inflation.  You buy a big fancy house, and then you need to fill it with furniture, and then you need a housekeeper because there’s too much for you to clean.  You now live in this nicer neighborhood, and all of your neighbors are driving fancy cars, so you think you need to drive a fancy car.  Don’t fall prey to this!Remember that it’s normal to struggle with this, and we all do!  Nobody’s a perfect robot who can always resist all of the marketing out there.  How to you minimize and manage your wants:Stop impulse purchases by instituting a waiting rule.  Use the 30/30 method coined by the Minimalists, someone else’s idea, or create your own rule.  The Minimalists created a 30/30 rule to help them stave off impulse purchases, and it’s to wait 30 hours for any purchase over $30, and then if it’s $100 or more, they wait 30 days.  We have personally used some version of a waiting rule many times, and we often find the impulse passes with some time, and we no longer desire the item anymore.  We’ve also heard of others who put things in their Amazon shopping cart if they want them, and then they only let themselves order from Amazon once a month, and by the time they go back and see all the things they have put in their cart they no longer want most of it.Create a purchase accountability partner, and run all new purchases by them.  Make sure it’s someone who will hold you accountable versus someone who will enable you to buy tons of stuff.  This could be your spouse, a good friend, or even someone you met within the personal finance community on Instagram.  Find a friend, and use each other to discuss and approve each other’s purchases before they happen.  Ask yourself some tough questions, and be honest with the answers.  Is this something you will use regularly?  Will this bring you joy?  Do I have room to store this item?  Am I willing to get rid of something else to bring this new item in?  Can I truly afford it?  Will it add value to my life?  Am I buying this because I want it, or to impress someone else?  Minimize how often you allow yourself to walk into a store or visit a website.  Avoid getting into situations where you will be tempted to buy things.  Out of sight, out of mind is a real thing.Walk around your house and look at all of the things you already own.  Remind yourself how much stuff you already have, be grateful for it, and ask yourself if you truly need more.  Learn to be content with what you already have.One in and one out rule.  If you decide you’re going to get this new thing, agree to give up something else for it.  Research less expensive or chapter alternatives to what you want.  This could be buying something used, waiting until it’s on sale, using the public library, or borrowing it from a friend.Remember the purpose of marketing.  Remember that it’s someone’s job out there to convince you that you need this item to be happy and to take your money in exchange for that.  Sometimes that recognition itself reminds us not to fall prey to brilliant marketing.  Don’t let the marketer win!Top 3 Takeaways:Continually work to distinguish between your wants and your needs.   It will help you make better decisions.  Understand that the majority of the things you buy are likely wants and not truly needs.  Recognizing this can significantly cut down on your purchases, expenses, and ultimately your cost of living.  Use the tips mentioned above and tricks to minimize impulse purchases and situations where you’ll be tempted to buy things.  Be grateful for all that you have, and save your money for future financial freedom or retirement.---Show References30/30 method coined by the Minimalists---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

People involved in real estate often talk about it like it’s the most lucrative way to make a living. But real estate is like any other investment:All investments come with riskAll investments take experience and lots of workAll investments require money to start outMike starts by explaining his new venture: a partnership LLC with his friend Liz whom he met at AT&T. Funny story; he met Liz just like he met Maggie: discussing benefits, savings, and investments at work. They decided that East Atlanta was the right location for good rental culture, affordable housing, and the likelihood of value appreciation. So they started an LLC and began looking for houses. They established their criteria, their strategy, both short and long term, and their budgets.After a few months of looking, Liz texts Mike one more and says, “We found it. You in?” The next day they were under contract.How do rental properties work financially?You need to find a place that will actually rent. Will people want to live there?Unless you have the cash, you’ll need to have a down payment. Typically 20%, although there are creative ways around this, which Mike doesn’t recommend.Get a mortgage for the remaining 80%.Then your rent (your revenue) needs to cover your costs.Misconceptions:Rental properties just churn off cash. They might create some positive cash flow, meaning your revenue exceeds your expenses, but it’s typically not that much. Think about it. Why would someone rent a place for $2,000 when they can own it for $1,000 a month. It’s passive income. These things take a lot of work. And the less work you want to do, the more you need to outsource, which eats into your cash flow.It’s easy. If it were easy, everyone would do it and be multi-millionaires.Why is real estate different:It’s easy to borrow money. It’s called debt when it’s bad and leverage when it’s good. Let’s look at Mike’s real example. They bought at $265K and put down $66K, 25%. They’re renting it for $2,000 a month, or $24K a year. That’s almost 10% of the purchase price a year. But they only spent $66K, which means that the return on cash is nearly 50% a year. What other kinds of investment can do that?Real estate is relatively stable. If you have a place where people want to live like the heart of Atlanta, the value will almost always go up.It’s self-sustaining. The renter pays your expenses, pays your principal, and hopefully pays you a little extra cash.Over time, you can cash-out refinance and use the appreciation to leverage up and buy more.Downsides of real estate investing:Requires a good bit of cash.Illiquid investmentBad rentersHouse problemsLong term play unless you’re flippingMust have the mental stomach for itTop 3 Takeaways:Rental properties are an investment like anything else. There are no guarantees.The benefits of rental property as an investment comes primarily from the ability to borrow money for it.It requires a lot of work, so if you’re not ready for repairs, tenants, and headaches, don’t do it! ---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We start with a 2020 goals check-in and review. And for each goal and result, we share what they are grateful for. What gets measured gets better and here are how we set goals using the SMART method:SpecificMeasureableAchievableRealisticTime-BoundMike’s 2020 Goals: 15% net worth growth - Mike is currently trending at 8% growth, but still feeling good about it given the year.20% annual spending reduction - Mike is trending at 28% on the year, which is impressive!Read 10 books - Mike has read 29 books in 2020.  Be a better vegan - Mike scores himself a B on this goal.  He found some recent motivation in Rich Roll’s book Finding Ultra.  Be a more mindful minimalist - Mike scores himself an A- on this goal.  Maggie’s 2020 Goals:15% net worth growth - Maggie is beating this goal at around 20% net worth growth so far.Deferring 75% of my income not tap into savings - Maggie is on track!Spend more quality and focused time with my kids and husband.  - Maggie scores herself a B on this goal.  Read 11 books - Maggie has read 37.5 books in 2020.Mostly minimal life - Write a blog post once a week, or 52 a year. - Maggie scores herself a D/F on this goal and has essentially given up on it to be pragmatic and focus on other goals.Meditating - Maggie scores herself a C on this goal.---Show ReferencesRich Roll’s website (and podcast)Rich Roll’s Book:  Finding Ultra: Rejecting Middle Age, Becoming One of the World's Fittest Men, and Discovering MyselfVitamix Blenders---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We start off telling Cait how excited and special we feel to have received an advance copy of her new book.  Cait shares a bit about herself, and then we dive into some discussion and reflections on her new book.  Here are the main topics we dig into with Cait:How Cait became a financial bloggerHow Cait paid off $30K+ in debtStarts, stops, and shame along the wayHappiness vs. Contentment Rambling vs. Adding ContextTaking things step by stepGiving yourself permission to try things vs. always requiring a long-term commitmentAdventure and accountability partnersJudgement Cait’s idea to organize the book around the hiking journey and hiking themesCait’s next adventureOur favorite takeaways and nuggets from our discussion with Cait:Cait has had a lot of starts and stops, some shame, and a lot of feelings.  This is normal and OK!  She used blogging as a tool, and looking back she wishes she had been kinder to herself and not deprived herself so much.  Cait says in her book that she doesn’t think happiness is a great way to measure our lives.  She instead measures her life through contentment.  She thinks happiness could be an unrealistic goal in life, vs. seeking to be content feels right.  She wants to make sure that her needs and wants are being met, and that she’s content with her choices.  Cait 100% validates that Maggie doesn’t ramble, but she instead adds a lot of context.  Giving yourself permission to just try something.  Don’t put too much pressure on yourself, and just be OK experimenting and trying things. And combine that with taking things step by step. Just take one initial step, then take another.  The importance of accountability or adventure partners.  And the importance of picking an accountability partner who knows what your best interests are and is going to reflect that back to you.  Someone who will help you dig deeper rather than enable things that may not be the best path for you.  You need the friend who’s going to tell you what you need to hear vs. what you want to hear.  A friend who would say, “I am not judging you, I am reflecting back to you what you’ve told me is important to you.”When others are judging you, it’s all about them and has nothing to do with you.   ---Show ReferencesBook: Adventures in Opting-Out: A Field Guide to Leading an Intentional LifeBook: The Year of Less: How I Stopped Shopping, Gave Away My Belongings, and Discovered Life is Worth More Than Anything You Can Buy in a StoreCait Flanders website---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

Chelsea’s love of Aldi inspired her to start an Instagram fan account where she posts about her everyday shopping at Aldi as well as Aldi’s famous special buys. Though she was first introduced to Aldi as a kid when her parents shopped there, she initially didn’t shop there as an adult.  She then got reacquainted with it a few years back, and it didn’t take long for her to get hooked. And only a matter of visits, and seeing the cost of a cart full of groceries, before her husband was on board as well.Aldi sometimes gets a bad rap in the US. In Europe, where Aldi began, it’s just a nice grocery store chain. Europe doesn’t have airplane hanger size grocery stores, so everything is small. But in the US, it feels different and to many people, different is scary.We give Chelsea some rapid fire Aldi Q&A.  Listen to the podcast to hear her answers:What is the best thing you’ve ever bought at Aldi?  Weirdest thing?How many different Aldis have you been to? How many different countries have you visited an Aldi in? Or what country would you want to visit an Aldi in?Do you ever shop at other grocery stores? Have you ever been to a Lidl and does it make you question Aldi?Most importantly, we finish with the impact Aldi has had on our lives personally and financially,Our 5 Ways Shopping at Aldi Will Change Your Life:A smaller store makes shopping easier and faster.A smaller store makes you a grocery minimalist and you’ll be happier because of it.Recurring international speciality items makes it easy to explore new cuisine.The Special Buys can save you a ton on the essentials items from gardening equipment to pool toys to clothes to home decor.  But don’t just buy this stuff unless it’s items you need!!The prices are so. Damn. Low.---Show ReferencesAldi for President on InstagramFriends on FIRE episode #24 - Save on Groceries---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

For most companies, the October/November timeframe is when employees are able to select their benefit options for the next year. It can be a complicated and cumbersome process, but the most frustrating part is usually evaluating the medical plans. They are by design complicated.To start, you should listen to episode #10 where we discuss car insurance. It’s all pretty similar.Some key facts to keep in mind about insurance: Insurance companies make money by paying out less in benefits than they take in fees. They are a for profit business. They’re not your friend or your good neighbor.Over your life, this means that you’ll pay more than you’ll get in benefits. Probably a ton more!You need to identify where you are most likely to incur a loss and choose insurance wisely for that situation.Protect yourself against the catastrophic, not the ordinary expenses.How Insurance Loss Calculations WorkLet’s 1% of customers are likely to have a heart attack. And it costs $50K for bypass surgery. The insurance company needs $500 needed per person to cover loss expenses.This is generally how your premiums for any insurance are structured.Insurance has 4 primary mechanisms:Premium - Per-period fee to Insurance CompanyDeductible - The minimum costs the customer must make before coinsurance benefits startCoinsurance - The % of expenses covered after meeting the deductibleOut-of-Pocket Maximum - The cost ceiling a customer won’t pay more thanHow do you choose what’s right for you?Insurance Providers need to cover roughly the same cost from every customer.Premiums, Deductibles and Expected Covered Expenses combine to equal roughly the same cost based on statistical averages.Providers try to accurately forecast paying slightly less in benefits than they take in premiums.A higher premium means a lower deductible. Whereas a lower premium means a higher deductible.There’s no easy answer because all plans have different details which make rules of thumb hard to provide. However, if you don’t expect to have a lot of medical expenses, the lowest cost plans are the best.  If you do expect to have recurring expenses for chronic issues for example, you might be better off with a higher premium, lower deductible plan. But you need to read the details.Spend time forecasting your specific needs.  Call you doctors to ask what things cost with and without insurance, think about best-case vs. worst-case and forecast it out in different plans, and make sure the doctors you care about are covered. Check which providers work best for your preferred network of doctors and hospitals.Check which plans cover specific needs the best for known issues you might have.Remember that only a high deductible plan is eligible for a Health Savings Account. Others qualify for a Flexible Spending account only. For more info, check out episode 59.Consider your family situation and how to split things up.  For example:  Kids usually have one fee no matter how many you have, so try to get all of the kids in your household on the same plan, even if you have a blended family.  Top 3 Takeaways:Treat all your insurance the same by selecting only what you need based on your lifestyle and likelihood for events. Protect yourself against the catastrophes, not the ordinary and small expenses.In most cases if you’re relatively healthy, a high deductible, low premium plan will be the most cost effective solution for you.Do your research though. There are nuances to every plan which could make or break a decision for you. Read the fine print!---Show ReferencesFriends on FIRE episode #10 - Car insurance is just as badFollow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

When Joel was 22 he moved from Australia to Hawaii and met his soon-to-be wife, and then they eventually settled in LA.  Joel worked incredibly hard in sales for many years and was quite successful, and then in 2018 he decided to take a sabbatical and has since discovered a lot about himself and what makes him happy. Joel further proves our theory that talking about money can improve your life and the life of those around you.  We discuss a number of topics with Joel:Joel explains how 5am Joel was hatched at a party one night talking with a friend.  It started as a 30-day experiment, and turned into a new way of life.He explains the many benefits that getting up early has brought into his life, including increased productivity.  He believes the pros outweigh the cons.  The main benefits include: Productivity - he just got more stuff done.  Instead of playing catch-up at the end of the day, he was doing preparation and planning in the AM and he helped me.  He started crushing it at work.He spent more time learning and learned how to do a ton of new things.He thought proactively about things he could do to help his wife.His health improved as he had more time to work out.  Even just 20 minutes in the morning would make him feel good all day long.  As Maggie and Joel debate the merits of getting up early and Maggie considers changing her own habits, Joel equates getting up early to paying yourself first.  Everyone is given 24 hours in the day, and they often don’t pay themselves first and do the most important things first.  Getting up early is a good way to pay yourself first.In the years since Joel started getting up at 5am, he had an epiphany of why he gets up in the morning.  He used to get up just for work.  Now he gets up for himself, for his wife, and for many personal reasons that are for him and not for anything else.  His parents taught him a lot of great lessons about money.  His mom taught him how to budget, save, and work hard.  His parents taught him how to be an independent self-sufficient human being so all credit to them.The Bigger Pockets Money podcast is the first time he heard the term FIRE.  And as they sat down and reviewed their finances they realized they were already half-way there just based on how they had been living. Joel’s biggest financial pillars and focus include: (1) Believing you can and knowing it’s within your power to change things. (2) Track your spending. If you don’t track where your money is going, you don’t know what your future looks like.  To build a good future you need to know where your money goes.  (3) Earn more income when you can to keep growing your net worth.  Joel now focuses more on the lifestyle along the way.  He used to just focus on the numbers, and then realized it’s not all about the numbers.  He started to think, why can’t I have some of those benefits now.  His focus right now is more around the lifestyle vs the numbers.  Joel is also figuring out how to be happy along the way.  His biggest focus right now is happiness no matter how much money he has.  He wants to live his happiest and best life.  He once thought “when I hit financial independence, I can do all these things” and then he realized he can do all of those things right now. He realized that the benefits of financial independence can be enjoyed along the way.  He is ok extending his financial independence date because he’s finding more happiness in a slower journey.  He encourages people to focus on what makes you happy now and what fills your life with joy, and focus on building that now vs later.  Everyone’s path is different.  Doing what everyone else is doing led him off path a couple times in life.  Figuring out for himself is a better way to go. Getting married and talking about money a lot more catapulted their financial journey too.  They realized they could be different and not live like everyone else.  His wife is his accountability partner.  He started this habit of writing each morning when he got up at 5am, something positive and motivating.  His email started to spread and people asked to receive it.  He writes a little bit about personal finance in that blog, and he once got a reply from “J Money” who subscribed to his list.  They reached out to him to ask if he wants to write for the blog budgets are sexy, and that is how that opportunity came about.  Joel quit his job in 2018 to take a sabbatical.  He admitted it’s tempting to go back for the money.  He admits the biggest thing he was scared of in life was having no money.  To confront his fears he quit his job.  He just needed to step away and remove work and income from the equation.  Joel says the epiphanies and life lessons he’s learned since taking time off his previously demanding job has been life-changing.  Joel talks about how it’s hard work to build wealth.  Life is hard work.  Life itself is work.  He used to think work was the enemy in life, and how he realizes it’s a tool.  Mindset shift that work is on your side.  The second you think you’re going to stop working, you’re taking a lazy way out.  No matter what it will always involve hard work.  Money doesn’t come easy, it’s a lot of hard work.The more effort you put into life, the more you’re going to get from life.  People can sometimes have unrealistic expectations about work and retiring early.  Your financial journey has nothing to do with others, it has to do with what you were dealt with and you have to work from that. Our top 3 takeaways for this episode:The importance of your mindset and believing that a better financial path is possible.  And tracking your spending to get there!Enjoy the journey.  Focus on your lifestyle and happiness along the way.  Don’t just focus on the numbers.  Life is hard work, no matter what path you choose.  And money doesn’t come easy, it’s the product of hard work. ---Show References5am Joel Budgets are SexyThe Bigger Pockets Money podcast The MinimalistsThe Fioneers Rich + RegularBook - The Bag Lady Papers - The priceless experience of losing it all---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money

We both focus more on tracking our expenses vs. budgeting.  We thrive on spending as little as we can, though Maggie does splurge more than Mike does and Maggie believes in spending top dollar in some categories of her life.  Although we focus on tracking expenses, we know a lot of people who really focus on setting and keeping to a budget.  If you’re budgeting, then you’re tracking to some degree as you need to do that to know if you’re meeting your set budget.  But you could decide to only track, and not set a specific budget goal.  Budgeting:Setting a dollar limit for categories of expenses you can spend in a time period. Typically this is based on your income, but can also be for one-off or special purchases.Pros:Helps develop discipline by creating a goal.Can help alleviate the guilt of spending money if you give yourself permission to spend up to that budget.Cons:You’ll always spend right up to or over your budget, even if you don’t really need something.  While helping create discipline to do so later, it doesn’t by itself drive better performance over time.Best to use this method if...You don’t have a lot of discipline, and you know you need and do better with clear boundaries.  You’re on a fixed income.  Systems:  Dave Ramsey envelope, YNAB, Mint app, personal capital, etc.Tracking Expenses:Cataloging every expense you have, reviewing it regularly and changing your spending habits because of it.Pros:Creates a tool for continuous improvement. Creates a great record of expenses for research or comparisonsAllows you to better forecast your income needs in the future, which is an absolute requirement if you’re interested in FIRE.Cons:Sometimes makes it hard to splurge if you’re constantly measuring yourself against previous months or years. Time consumingTediousBest to use this method if...Budgeting hasn’t worked for you in the past.You can’t explain where your money is going.You have aggressive financial goals.You’ve already established some level of discipline. Systems:  Manual spreadsheet like we do, Mint app, personal capital, etc. Top 3 Takeaways:These are two different ends of systems and approaches, and they each have their benefits.  Think of them as a progression. Move from budgeting to tracking as you establish discipline.Budgeting is easy, but the results can be mixed. Tracking is hard, but the potential is huge.Whatever you decide, you need to understand where your money is going. Until you establish a method to improve your spending, chances are it will continue to get worse because the economy is set up to get you to spend more and more.--Show ReferencesPersonal CapitalMintYNAB - You need a budget---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  friendsonfiremm@gmail.comVisit our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book: Your New Relationship with Money