The Third Option Between Working and Retiring

25:16Thank you.

25:39All right, let's move to step four then. Yeah, step four is exciting for me because I really think that there is an opportunity for people to set a specific goal. with investing. And that is to me hitting Coast Fire. So once you start investing and move towards this goal, and essentially Coast Fire is invest, it's essentially just front loading your investments. So you get to a point that you've invested so much that that amount of money will grow with time and compound interest and eventually get you to the goal that you have for retirement in your 60s. So for example, my wife and I invested around$500 ,000 by the time we are 40.

26:18If we did not contribute anything else going forward from there for the next 20 years with regular market return and inflation, we could expect north of$2 million by the time we retire at 60. That's pretty comfortable for what we need in our lives and on all those situations that we've built and then our kids moving off and not really needing the bank of mom and dad anymore. And when you're doing that process, try to make it as simple as possible, utilizing index funds and investing for the long term, taking advantage of tax advantaged accounts like your 401k, your IRA, even your HSA can make the process really easy.

26:57Even a taxable brokerage account. So you can consider even early retirement options moving forward in that journey. So just to explain the math to the people who are listening, who are wondering about how 500 ,000 turns into 2 million, 500 ,000 by the time that you're 40. Now there's this thing called the rule of 72, which means that 72 divided by the rate of return is the amount of time it takes your money to double, roughly. So if you assume a 7.2 % return as a long-term annualized average, that means your money would double every 10 years. So$500 ,000 when you're 40 doubles to a million when you're 50, which doubles to$2 million when you're 60.

27:35That's the math behind it. And that's$2 million at the age of 60 with a fully paid off house. Absolutely. Yeah. And you've just led to step five. After that, after you've really hit that Coast Fire moment, there are important reasons to invest after that. But really, the main purpose for a lot of people for investing is retirement. So once you check that box of Coast Fire, I move towards paying off the house. And the reason that I move towards paying off the house is that you are lowering your expenses by quite a bit and allowing you to make retirement even easier, allowing you to not need to make as much money in the today.

28:12And by decreasing those expenses, you can make some drastic decisions in your lifestyle that will allow you to say, wow, maybe I don't want to work my full corporate job anymore. Maybe I want to go part-time or at least one of the partners can go part-time to start. So by doing that, Coast Fire first, then Mortgage Freedom, it allows you to check that box that your retirement is set. And obviously, nothing's set or guaranteed with investments, of course, but you know, average market returns. And then with paying off your mortgage, you're drastically lowering your expenses. For me and my wife, our principal and interest payments were around$1 ,300.

28:51So once we got rid of that, that was, I'm going to do some bad math, maybe$15 ,000 back in our lives. That was decreasing our expenses that much. That makes retirement easier. That makes just living life easier after that point. So that would be step five. Right. Do you still choose to keep homeowners insurance on your home? Because technically, that's not required once you've paid off your home. Yeah, we choose to keep homeowners insurance on our home. And I'm sure I'm very glad that we did because just last year, we had a flood in our house. It was a very bad winter storm. And some pipes froze in our kitchen.

29:28Nicole and I woke up to three in the morning in January, very cold feet in our kitchen full of water. And I'm very glad we had that homeowner's insurance because they took care of everything, they cleaned it, and it even helped us to get a nicer, newer, modern kitchen afterwards. So homeowner's insurance, definitely worth it. Excellent. Step five is pay off your home. But what would you say to anyone who's listening to this who is working through the steps, but they're currently renting? Yeah, that's a great position to be in too. I think there's a lot of advantages to renting over actually owning a home.

30:01and people are making that decision right now. Is it worth it or not? For me, in my 20s, I really regret buying a home as early as I did. It made me feel very locked up in a decision that I didn't really wanna have committed to that early in my life. I wanted flexibility. I wanted autonomy in my 20s. I'm single. I wanna make some decisions on where I wanna be in the country. Maybe I don't wanna live in Michigan. Maybe I wanna move to Chicago, but I was locked up in a house and the market wasn't doing all that well. So it was even difficult for me to sell the house. When I had a family, I really wanted to have a stable place for them to be, school system, a house that they always know.

30:39But some people choose to rent. And I think that is fantastic because it gives you that flexibility. It gives you that autonomy to say, hey, if I'm ready to move or if I'm not liking this situation, that's fantastic. But also, depending on your landlord, of course, can reduce the amount of work that you need to do living there. You know, like my wife and I are constantly taking care of our lawn, constantly, you know, fixing things, repairing things. If you've got a good situation with your landlord, that can be even more relaxing. So if we're on this process and you are renting, you can skip right over step five and continue moving forward with creating the time freedom that you want.

31:15Well, what if you're on step five, you're currently renting, but your goal is to eventually buy a home? Oh, yeah. How does that fit into this framework of reaching Coast Fi and trying to create additional time freedom and maybe going part time? What I'm sensing here are priorities that really get juggled. I would say depending on your priorities and those conversations need to happen between you and your spouse or your partner and just say, what is most important to us right now? Is it investing so much that we hit Coast Fire and then we can consider maybe working less? or is it, hey, do we need to double down on building up enough of a down payment where we can get into a house and create that home that we live in for a long time?

31:58And I know that's a big deal for a lot of people who are looking for homes in this very competitive environment and higher interest rates than they have been in the past. So I think having those conversations and deciding what's most important to you and then prioritizing those dollars to make it happen. Before I move on, I want to circle back to that$2 million by the age of 60. How do you know that that's enough for you in retirement? Yeah. So for me and my wife right now, we currently live comfortably on around like$75 ,000. And that's with two kids in our house. And so we're paying for things that we won't be paying for when they're older.

32:35Now, I know inflation is a big thing, but a lot of the calculations that we're talking about really do factor inflation in there. I don't think I'm only going to earn a 7.2%. I think that's really probably factored in with the growth of inflation too. Just based on past market returns and how we're investing, I feel confident that we'll be able to get there. So really knowing what we're spending today is a good indication of where we might be in the future as well. This is also not including benefits like Social Security. I know that it's a big influx kind of moment right now for Social Security, but I really do believe that we'll get 80 % of what's there, 70 % of what's there.

33:14And that's not a small amount of money for two people that worked in corporate America for a while. And my wife and I looked it up and we're both potentially due around$3 ,000 each by the time we hit 62 and move on. So that's not going to be a small amount of money to support our goals during that timeframe. So we're more than set, I would say, and we'll probably have enough to enjoy our time. Also, a lot of these calculations are really dependent on people living a full 20, 30 years after 60 years old. And with the average age of people passing away in our country around 78 and unfortunately 75 for men, sorry, fellas, we really have to make sure that we're not over-indexing on having too many millions in our later years and not being able to enjoy enough of it today.

34:04So I know that it It might be a countercultural message to say, hey, enjoy. It's not a YOLO message, but it is a little bit of like, hey, yeah, how do we find that balance of enjoying today and liking our lives? Because it is important to like your life and having a safe tomorrow. We've now wrapped step five. Yeah. And let's just very quickly go over. Step one is to really articulate what that dream is. Yeah, absolutely. Define that dream. Step two is pay off all of your debt. Yep. It's a defensive step. It is. And then step three is also a defensive step and it's protect yourself, estate planning, insurance and emergency fund.

34:42You got it. Step four is to invest enough to reach coast fire. And then step five is to pay off your home if you're a homeowner. Yes, that's it. You got it. Nice recap. Very good. Thank you. Thank you. I love it. With that recap in place, then let's move to step six. Awesome. Step six is a really fun one. It is called stockpiling that F you money. So with this money, this is liquid cash in a high yield savings account. This gives you that confidence, that power, that ability to decide what you want to do in the next chapter of your life. Is this money that will allow you to be a bridge to take you from a place of maybe you're not comfortable with your job right now.

35:29Maybe you're uncomfortable with who you're working with. or maybe you're just working too many hours in that place. Can this money be a bridge for you to go from a place of hardship to a place of peace and prosperity? Now, just up and quitting your job with no money in the bank account can be quite a dangerous thing to do, especially in this marketplace that we're in right now. But if you create a plan where you are moving towards a life that you're more interested in or even a part-time work life, you can use this money to support that transition, whether that's $1 ,000 a month or a couple thousand dollars a month in order for you to get to a better place.

36:07Now, when we're speaking to couples or people who are living together or combining income, this doesn't all have to happen at once. One partner at a time is a pretty good step for this. So if you are working, let's say an extreme version, right? Let's say there are both working full-time jobs and then one of them even has a little side hustle to make things happen. So it's really two and a half full-time incomes, right? Could this bridge money be at a minimum allowing you to say goodbye to that side hustle? Or at another level, could this allow us to go to 1.5 incomes in the house? So 1.5 household income.

36:45That way you're making a step process towards working less and enjoying more of your life. So looking at it in that fashion, using this money as the ability for you to walk towards a better life can be a great thing to do. So again, it's part security, but part empowerment. I've heard many salaried knowledge workers who move to part-time say that often when they attempt to move to part-time, what actually ends up happening is their scope inflation in the amount of responsibilities that are handed to them. And they functionally end up working full-time, but for a reduced pay. Yeah, that does not seem like a very good situation.

37:24Exactly. Exactly. If you had to look at that movement from what is the ideal situation for you to move into, if you had a good situation with your employer and you had advanced conversations with them, they're already paying you money, having that conversation to say, do you know other people within our ecosphere here that are working part-time or three-quarter time or something like that? Is that a possibility here at this organization? If you have a good relationship with your manager, they could be very honest with you and just say, nah, man, that's not this environment. That would not happen well here.

37:59And that's something for you to be aware of. So whether that's your manager or somebody that you know, like, and trust within the corporate environment that would give you that information, maybe that's more of a colleague, you'll have to make that decision. But some people do work in a situation where that is encouraged. Instead of losing this person with all of their knowledge and their ability to help move the business forward, being able to work three days a week, two and a half days a week could still be great for the business and it could still be great for the individual. So being able to have those conversations could be great.

38:29And I think if you're talking about being able to move to part-time, this would be the easiest route because they're already paying you. They know you're a good employee and they want to retain you, but they don't want to lose you. Obviously, this depends on your relationship that you have with your employer, but this could be the best situation. It's always easier to get paid where you're already getting paid as opposed to being like, I'm going to start a brand new business today. You know, like that's a drastic step. Really stay where you're getting paid. Maybe you can just work fewer hours.

38:58In terms of the people that you've talked to who have taken a step like this, has there also been a benefits reduction? Yeah, depending on how many hours you take, sometimes you're stepping into an area where you are losing those benefits. So again, the first best step in that scenario is if your partner has benefits, obviously taking advantage of those. Now, if your partner's in a situation where they don't have benefits, this becomes one of those situations where people say, well, if I don't have health care, then I can't do this thing. But as you know, or maybe you do know, I don't know your situation with health care.

39:27I buy my own. Exactly. Go out into the marketplace. It was super scary for me originally. I'm like, wow, what a mystery question. You know, I have to have this job so I have my health care. But really, I went on to the marketplace. I found the exact same high deductible plan that I had within my employer. I just pay for it now. Right now we pay about 700 bucks to have that plan. It's reasonable. It ends up being something that I just funnel into my business as a business expense because I'm the only employee of my business. It works out just fine. My wife at the time didn't have health care options to lean into.

40:01So we said, hey, this is how much it costs. And in order for us to have that, it's income and revenue that we need to generate in order for us to pay for it. So it exists. I think it becomes a very fearful moment for a lot of people, especially in our country where healthcare feels so confusing because it really is. It's not set up very well for humans to understand. But it does work. And I can tell you from experience from somebody who's been using the marketplace for the last five years, it's super easy. The website's pretty intuitive. And it just gets paid every month. then it's the same insurance that I had before.

40:35Yeah, I've been buying my own health insurance since 2010. There you go. Yeah, since 2010. So it was actually pre-ACA. Was it a lot more back then? No, it was a lot less. A lot less. So much cheaper. Oh my goodness. Yeah, it was like 100 something a month, like literally 100 and something per month. Wow. So yeah, significantly, significantly cheaper. It did not cover as much though. So the ACA compliant plans have 10 particular points that they are required to cover by law. Those plans back in 2010, they were a lot cheaper, but they had less coverage. Yeah, that's a lot of changes. And that number that I shared with you, everybody, so that's covering four people.

41:16So it's me and my wife and my kids. So if$700 seems like a lot, it's because there are four of us. So obviously, the more people you have within your network, that could raise the price or lower the price. Yeah, well, it also varies a lot state by state. Yeah, that's true. So in the state of New York, it's over$700 just for me. Ah, okay. That's a good perspective for me. Thank you. Yeah, yeah. So I'm in Michigan, everybody, just for HealthFlare. Yeah, exactly. And in the state of New York, you cannot actually buy through healthcare.gov. They portal you to a separate site that is a New York-specific site.

41:47Got it. So you mentioned earlier that the website is very intuitive. That website is not available in all states. Oh, very good. ACA compliant plans are available in all states, but you can't necessarily buy them through healthcare.gov in all 50 states. Got it. Yeah. So there is a cost, but it is possible. Sometimes it just feels like I won't be able to get it. You will be able to get it, just there's a cost to it. So it's important. And as I was saying goodbye to my corporate job, this is something I was researching a lot, looking at the prices and making sure it was something our family can handle.

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45:13let's move to step seven then excellent well step seven since you've built up that fu money and you're interested in creating a part-time life or one that you at least own more of your time this is your opportunity to create your ideal three-day work week i think this is cool because if you look at the calendar there are seven days right why do we work five of them and only get to relax for two of them. It just seems unbalanced, right? So this is an opportunity, at least one that I'm proposing that we flip that script and say, let's enjoy four of those days and work three of those days. And hopefully you pick work that you do enjoy so that you're enjoying all seven days.

45:52But I think sometimes, at least in my experience, sometimes I over-index on work because I get excited about it or I get in sort of a flow that I start forgetting about my other identities that I've talked about caring about, but I'm not actually putting any action towards. So for me, maybe it's a mental thing where I just say, hey, I am done working at this period of time. That helps me to turn my brain off. And I don't know if you ever feel like this, Paula, or at least I did in the corporate world. I would finish my workday on Friday, but my brain wouldn't turn off from those assignments until like whatever, Saturday at like 6 p.m.

46:28And then on Sunday, I'm starting to get the Sunday scaries again and I'm starting to think about it. So really my time for relaxation outside of work was maybe like eight hours and work was just consuming everything for me. So in order for my brain to calm down a little bit, I really need to make a buffer of time so I'm actually able to enjoy my weekend. So for me, I'm trying to just not work on Fridays at all. For me, I'm not doing the full four-day weekend yet. That's like a long-term goal for me. Right now I'm working a half a day on Monday, but long-term I would love to experience that three-day work weekend, four-day weekend.

47:01So at this point, this is an opportunity for you to design whatever works well for you. If you never want to work on Fridays again, if you never want to work on Mondays again, this is your opportunity to be the best boss you've ever wanted to be in your life. You know, like when you had that boss that said, hey, you can't travel on this day or you can't take this time off or make sure you're checking email even on Saturday. It's like if those things that you never want to do again, this is an opportunity for you to decide to say, this is the kind of life that I want to live and I'm going to help myself be that boss.

47:32You know, so this is different, obviously, if you own your own business versus maybe working part time for some business. But by designing your life in a part time fashion, you're creating some separation from your work life and your home life. I think a lot of people would say, you know, if you're working for another company, that the issue is that that company just does not respect those boundaries. Yeah, yeah. Yeah. So I think that comes into a situation where you need to continue to ask yourself, what am I hacking away at that helped me to feel more comfortable? Does it still feel comfortable today?

48:06Do I need to find a different situation that would feel more comfortable? But with that F you money, I think that gives you the confidence to start nodding your head and saying, I can take some bolder steps here to continue moving in a direction that feels right for my situation, my family, my marriage, and take advantage of that. So for my wife and I, we built up about 12 months of expenses and an FU fund for us to make that transition away from my corporate career into a solopreneur life. Now, I didn't use all of that in the first year, even though there was a global pandemic that came through.

48:38But I was very glad to have it because there was a lot of income changes that happened in 2020 and 2021. But that thing really trickled for another two or three years that helped me make some smart decisions on people that I wanted to work with or clients that I wanted to say no thanks or hours that I didn't want to work. So this allowed me to have that bridge to a place that I feel a lot more comfortable. And for my wife, it was the same thing. She was working in corporate America and was sick of it. And she said, man, I've always wanted to work with my hands and get out of the email grind. I would love to go back to trade school and become an esthetician.

49:16And we had enough FU money for her to do that. We said, hey, we got$30 ,000 over here. Why don't you go and do your trade school, take complete time off. We'll use that money to pay for our lives a little bit and pay for your school costs. So she did that. She went back for, I think it was about six months of a program, learned the trade. And now she's been working as an esthetician at a dermatologist office for the past two and a half years. She likes the quick part-time schedule. When her day's over at five, there's no email to check and make sure the clients are bugging her. These are decisions that she made for the betterment of her life.

49:49Now, are there income hits when you say, hey, I'm going to move from corporate marketing to becoming an esthetician? Of course. And same thing for me. I'm going to move from being a director in sales and marketing to a podcaster. There's going to be income hits. But if you're not investing for your retirement anymore, you don't have a mortgage payment, you've eliminated all your debt and you've got money set aside for any things that might go wrong in that situation, you have some flexibility. You really do. What you just described is complementary to, but technically separate from Coast Fire.

50:22Oh, tell me. Because Coast Fire, as you defined it earlier, is knowing that you've got enough investments that you could never put another dollar into a 401k again and you'd be good. Yeah. So functionally, if you imagine that your retirement contributions are, quote unquote, a bill, you have just eliminated a huge bill from your life. Absolutely. And so if you pay off the mortgage and you eliminate your retirement bill, then... This could be$70 ,000,$80 ,000, depending on how much people are putting in. Right. If you've got two higher income earners or two individuals making$100 ,000, this could be a lot of money.

50:58If you had a high savings rate, maybe 30 % savings rate, and you eliminate that savings rate because you don't need it anymore, that's a lot of money. You had$60 ,000,$70 ,000 back in your life to say, oh, maybe I don't need to work as much. So the value in Coast Fi and essentially the cash flow that gets freed up by eliminating the retirement bill is quite substantial. But then when you talk about taking the income hit, both you and your wife went from much higher paying occupations to much lower paying but more flexible and more enjoyable occupations. And in doing so, what strikes me as I hear you talk about that is that while Coast Fi helps with that, a person who has not necessarily reached Coast Fi, but who has eliminated their debt, has some savings, they've protected their income, like a person with essentially good financial hygiene could still be able to do that.

51:51Absolutely. Absolutely. I think it's mentally one of those things for me, what is saying, why do I have this job? Well, I have this job to make good income and for the benefits. And so once you say, okay, well, the benefits of this 401k have been fantastic, but I don't really need that benefit anymore. Or the healthcare has been fantastic, but I can pay for that with the growth of my small business or in a different fashion. The benefits of staying there start to fade away and you're like, what am I doing here? Well, the high income is really great. It helps me to enjoy life, but I'm actually saving a lot of it.

52:26Maybe I don't even need the high income part anymore. And then you say, well, what do I need this corporate job for anymore? So being able to do some of those things helps with that mental decision of, well, I do have this golden handcuffs. I'm just going to stick around a little bit longer. So mentally, if you start to tick off these boxes, it just becomes an easy thing for you to nod your head and say, yeah, why am I here? How do you resist lifestyle inflation, particularly when you have more time on your hands, which means you have more time to spend money? Yeah, I think this is something that we've struggled with too, because when we had more time, we had more opportunity to say, well, why don't we do that?

52:59Why don't we vacation more? Why don't we sign our kids up for summer camp? Why don't we sign them up for travel soccer? And these types of things started to eat into our budget a little bit more. And this was a moment for my wife and I to say, well, do we want to be working more in order to pay for these types of things? Do we want to work more and grow my business or grow your business and do that? And then over the past couple of years, we've had some moments where we said, well, what do we care about more? Owning more of our time or our daughter playing at a travel soccer league or our son also playing at a travel soccer league.

53:32These things became very easy decisions for us to say. Our kids are not going to the Olympics, man. Our kids are not even going to probably even play in college. I'm not even sure they care about soccer as much as we're putting it on them. Let's start to pare back some of these things that we thought as nice luxuries in the parenting department and start to say goodbye to them. Some of those things were even summer camps. We make those decisions. We say, what do we care about more? Do we want to work more in order to pay for these things? Or are we happy with the lives we have? So we've had to have some of those moments between our marriage and just say, what do we want to pare back?

54:04Or what do we want to do to increase our income? And a lot of the decisions have been easier just to pare back. We do love vacations, which is a lot of fun. So sometimes as a part of this process, we do a little bit of credit card hacking or travel hacking to make that process a little easier. and then that can be compliments to this Coast Fire lifestyle as well. Let's move to step eight. What happens next? Well, step eight is to intentionally design your four-day weekend. We've talked about how you're going to work for those three days. Now you have four days. Sometimes this can be like a, whoa, what do I do with my time?

54:38And then the first instinct, because we've been doing it our whole lives, is, well, I could just double down on my work or I could just grow my business or I could do this. Start a new project. I could start a new project, right? I could become more busy. And that's, it's very common and very, you know, normal for a lot of people. But I think if we go back to that dreaming portion and saying, well, what did I want to do now that I have this free time? I need to dial that back and say, what did I say I was going to do? Did I say I was going to take care of my health more? Did I say I wanted to live a long life and be able to be a present father and do things with my kids?

55:12Did I say that I wanted to volunteer more in my community. Did I say that I wanted to learn the guitar? It's like, are these things that you're actually going to start doing on your four-day weekend to take advantage of life and create those multiple identities? I loved having a conversation with Simone Stolzoff, who talked about that important portion of you're not just a worker. You're not just here to create economic value. You are a father. You are a son. You are an athlete. You're a musician. This is an opportunity for us to lean into those different identities and create the life we've always wanted.

55:42If you want that relaxation piece and you need that for a couple months where you're saying, man, I've worked forever. I just need four day weekends to do nothing. That's fine. Lean into relaxation. That's okay. But then after you've relaxed for a little while, I think maybe some people you've talked to in the financial independence community find that time for a breather and then they say, okay, now what am I going to do? So taking that time is good, but really starting to say, what can I do to take care of my health so that I am a great husband, take care of my health so that I have a full cup so I can actually support my kids and their goals, take care of my health so that I can spend time with my aging parents, spend time with my friends, create hobbies, create development in the community where I'm connecting with real humans.

56:25Because a lot of the conversations that I know we have on these shows is about happiness. And a lot of that happiness comes from making real human connections with people and creating relationships that last. So this is our opportunity to do that, to create that sustaining happiness that will take us on to our retirement years so that we don't just automatically turn 60 and then say, huh, now that I'm not working, what do I do? Because I've heard that a lot of people who get to retirement age and they don't have that direction, all of a sudden have this quick depression that hits them. I'm not a worker anymore.

56:59Who am I? What is my identity? This is our opportunity to test out those identities and say, who do we want to be? What do we want to do? And now you You have four days on a weekend to do that. We touched on earlier the fact that even though you're less busy, your friends aren't necessarily less busy. Given that you don't have the social interaction of a workplace, how do you fill your space with people outside of your family in that four-day weekend, in that abundant time? It's still something I'm working on because I didn't calculate that when I said, hey, I'm going to take my Fridays off and I'm going to take my Monday mornings off.

57:36and I want to connect with more people. But I have found my buddy will be like, no, dude, I have a shift today. You know, I'm working or no, I can hang out on Saturday. And I'm like, okay, all right. So what else can I do during those hours when my friends are typically busy to fill my cup? And a lot of the things I've been leaning into lately are taking care of my health. And I have not been the best at it over the past, say, five to 10 years. And I know the importance of taking care of your health will help you to have those long years, help you have that longevity so I can actually enjoy maybe a 30-year-plus retirement.

58:10So I've been trying to take that spare time on Monday and Fridays to really do that. And as a dad and as a husband, there's a lot of things that are happening around the house that I can do to help out with. I think in the past, maybe more traditionally, my wife was making more of the meals. My wife was doing more of the housework because of the stay-at-home mom situation versus me being in the corporate life. I've tried to be a better husband to say, hey, what can I do to make dinner a few nights week during the week? What can I do to clean the house up on Friday so that when you come home on Friday, you're coming home to a clean, simplified house so you're not turning into some chaos here?

58:46What can I do to do the yard? Just a little housework takes up time. And as you see, you start to free up that time. There's a lot of these things you're packing into your weekend. And now when you do have your weekends come up, it is totally free to spend time with those friends when they are available. You say that you haven't been taking care of your health, but I remember going to a restaurant with you in, I think it was 20, no, it was, it was 20, well, it couldn't have been 2020 because that was a pandemic. So we couldn't have gone to a restaurant. Could have gone to a restaurant, yeah. So I guess it must have been 2019.

59:16And you were on some, were you gluten-free and keto or something? I think maybe I read that Tim Ferriss book and it was like, I was like less carbs and fasting and stuff like that. Like intermittent fasting, but also gluten-free and maybe also a little bit keto. Yes. And you had like all of these food restrictions. I was like, I don't know what this guy eats. Yeah. So you like boiled chicken and broccoli. So diet stuff I think I have been doing well with, but the exercise piece I had not been dedicating enough time for. So I'm very happy that I have a lot more time now to be doing that. But thank you for that compliment.

59:53I appreciate it.

59:57All right. So we've covered step eight. Yes. Lead us to step nine. Yeah, so step nine is really leading into simplifying your life. As you alluded to, I think, in one of your previous questions, sometimes you might feel a little bit of a lifestyle creep. Sometimes you see people maybe with that bigger house than you, better car than you, whatever, more expensive car than you. So now that you have some free time, you start to see, wow, there's a lot more marketing messages out there that are saying, I need to do these things to have the trappings of a good life. or I'm going online maybe more with my free time and I'm saying, oh, wow, you know, I should probably have a bigger house or I should have that better car.

1:00:35This is an opportunity for us to recognize that when we have free time, sometimes that can get swallowed up by the consumeristic culture that we have or people who are just interested in grabbing more of your time. This is an opportunity to continue to say, I would like to have a simple life. I would like to continue on this path and say yes to the things that matter most. And it's going to be tough because you're going to have more time and potentially have more money depending on how things go for you. But it is important to continue to say, what are those values and how can I simplify things?

1:01:10If you're doing things within your schedule, if you're spending money on things that still don't matter, continue to have a check-in process with yourself, with your spouse, so that you're on the same page and you're eliminating the things that don't really matter for you. Now, that can be different depending on which spouse you're talking about. Some things that really matter to me, my wife doesn't really think they matter to her and vice versa. But we have those conversations. We set aside time in the morning for important conversations over coffee or we go for a run on Monday mornings. And we kind of lean into some of those things that are important to us right now.

1:01:45So part of our plan as a family is we continue to eliminate things that don't matter, continue to simplify things. So I think it's important for you to have those introspective steps at that point. Once you've built your four-day weekend and you're saying, hey, how do I maintain this? How do I make it consistent? A part of it is not going back into that lifestyle creep, not going back into things that don't really matter. And my wife and I find ourselves in those conversations sometimes. We're like very comfortable right now and we make enough money to live well. And sometimes in our brains, we're like, should we get a bigger house?

1:02:20Should we get a bigger house? man, that would change everything. Do we want to start back at step one and get our full-time jobs again in order to have that bigger house? And then we both look at each other and say, nah, we're fine. This is plenty of space for four of us. It's an opportunity though, because it constantly hits your brain where you're saying, should I have bigger, better? Should I have more? And sometimes less is more. How do you deal with your kids asking for things? Yeah. We live in a nice community and there's a lot of families that have, I would say, visually more affluent lives than us.

1:02:54So, for example, one of my good friends that I coach my son's flag football team with, he's a very successful business owner. He's done very well for his life. We go over to his house and he has a full sport court in his basement. So like a whole basketball court in his basement. So my son goes over there who's 11 years old and has a great time. And he comes home and he goes, Dad, why don't we have a sport court in our basement? So this is an opportunity for me to have some conversations exactly like what we're talking about. Buddy, we could have a sport court in our basement, but you know what that would do?

1:03:30That would require dad to go back to his corporate life, continue to grow my income and travel a lot more and be gone a lot more than I am right now. Would you like that? And he said, oh, no, no, I love being with you. You know, I love having time with you. and knowing the trade-off of being able to keep grinding and grinding for a sport court or whatever it is, there's always going to be more things or more stuff. And even if we have the multi-million dollar house, then we're going to look at the family that has the jet or whatever. There's always going to be more wealth than you. So you have to find that moment of contentment and then do your best to share that with your kids too, because if you're discontent, then your kids will be discontent as well.

1:04:13So a lot of that comes with just practicing gratitude for what you have, being able to physically write that down a couple of times a day just to say, here's the things that I do have that I'm happy with and then things that I'm craving for or wanting more. And if you can instill those things into your kids, I think that is a lot easier for them to see than for you to tell them saying, hey, you should be more grateful. It's like, I need to express that and show them how to do that. and it becomes a little bit easier to find contentment as a kid as well. Many years ago when I worked at a newspaper, I had an editor who told me the story.

1:04:49He said he had a daughter who was about three at the time. One day his daughter turned to him and was like, Daddy, when are we going to have a lot of money? And he was like, oh, don't worry, we'll always be okay. We'll always have a roof over our head. We'll always have food. Don't worry. And she was like, yeah, but when are we going to have a lot of money? And he was like, well, you know, we've got more than many other people do. You know, we're good. And she was like, but when are we going to have a lot of money? And he was like, well, Anid, to be honest, I don't think we're ever going to have a lot of money.

1:05:27And then she said, but then if we did, you could spend all of your time with me. Ah, interesting. Yeah. That's interesting. And he was reflecting on it. He was like, I must have told her at some point, like, hey, if I had all the money in the world, you know, I'd spend all my time with you. So then she was reflecting that back. She was like, well, when are we going to have a lot of money? Because then you could spend all your time with me. I love it because a lot of the time the kids hear, well, I got to go to work because I need to make the money or I got to go to work because I got to pay that mortgage.

1:05:59This mortgage bill isn't going to pay itself. So they keep hearing that over and over again. Well, what if you didn't need the money? Then you could be with me all of the time, right? Right. That's not where I thought you were going with the story, too. That's a good story. I like that. So we've wrapped step nine. So now we're on to the final step, step 10. Step 10 is to show your kids the way. So this is an opportunity for you to instill these generational wealth habits into your children as early as possible. Of course, not to cram it down their throats, but to show them the way. Obviously, through your actions, through step one through nine, hopefully your kids are there.

1:06:38Maybe they're not following along at every element of the process, but they're watching you as the parents going through this and seeing how much work that you went through to pay off that debt, to make those plans together, to invest for your retirement, to slowly say goodbye to a job that isn't serving you anymore. They're watching you put your family first. And these lessons are being imparted to your children so that they can learn how to own their time in the future. And a lot of that comes with our kids being able to practice with money themselves and have money in their lives and being able to utilize it in an early portion of their lives and then break it into fashion.

1:07:20So I like to say, when you have kids, as early as possible, if you can, start to instill some of these things with what I like to call the 60-40 generational wealth plan. Any money that's coming into their lives, whether that be money from a generous grandma or the lemonade stand or their first teen job, 60 % of it should go towards spending on the things that they love, the motivation for them to actually want to work, do things that they like. whether that's buying Roblox or candy or clothes. My daughter's very into clothes right now. It makes her happy. If at an early age, you can say at least investing 20 % of that money at an early age gets them into the habit that they are using that investment to buy back their future time can be a very smart thing for you to do early on.

1:08:06So investing 20 % of that, saving 10 % of that, and then giving 10%. The giving portion can be any way that you feel generous. This can be giving to friends. This could be buying grandma a birthday present. This doesn't have to be charitable. This doesn't have to be house of worship. But if you're into those types of things that that's how you want to give, that's fine. I don't think there should be any sort of restriction on how you give. I think the idea is just to be generous with a portion of your money because there have been so many studies on what makes for a happy life and a big part of it is being able to give and serve others.

1:08:42I know you do that just through your medium here, Paula. I know you get a lot of joy just helping people with their financial situation, giving them that financial independence. This is a great way that you're serving. And obviously, if you can teach your kids those lessons with even just a portion of their income when they're young. Now, this can be a tough sell for kids, obviously, but honestly, as a parent, there's a lot of tough sells. Getting my kids to brush their teeth daily twice was really, really tough. You're going to have to do this so you don't get kept. I don't want to do it. It's like, well, there's a lot of that type of stuff that you don't want to do even in your adult life.

1:09:17If you start to do them now, hopefully by the time they're 18, maybe they won't stick with the whole 60-40 thing by the time they're 18-20, but they'll at least remember those lessons that some of my money needs to go towards investing, saving, and giving that will help me have a life of generosity and over a short period of time, maybe a life of freedom where you can decide how you want to live your life. We've been doing this with our kids for quite a while. They've had an opportunity to work within our family business, so we've been able to pay them an earned income and contribute to their Roth IRAs.

1:09:50My daughter is close to$10 ,000 in her Roth IRA at 13. Her net worth is like$12 ,000. My net worth at 28 was negative$50 ,000. So the fact that my daughter has a$12 ,000 net worth at age 13 is going to put her a leg up much further than where I am. So that's my goal personally with my family and other families out there is, hey, what can we do to help our kids start this as early as possible so that they can maybe live without debt, hit coast fire early, maybe buy a home, pay off their mortgage, and then decide what work feels good for them. Maybe that is working in the corporate world and working for a company that you really feel passionate about and working 40 hours.

1:10:29That's their decision. But if it is owning their time, owning their own business, and being able to structure their week how they want. That's what I'm hopeful for. That's beautiful. Well, Andy, thank you for spending this time with us. Where can people find you if they'd like to learn more? Absolutely. Well, I have a podcast called Marriage, Kids & Money and a whole book about this conversation that we're having right now is called Own Your Time. You can pre-order that before January and it's available in January. You can find it on Amazon or Barnes & Noble. Wonderful. Thank you, Andy. Thank you.

1:11:02Thank you, Andy. What are three key takeaways that we got from this conversation? Key takeaway number one, being imbalanced in either direction, whether it's too many hours at work or not enough capacity to be able to explore things outside of the house, that imbalance in either direction can make people unhappy. And his honesty about that That common dynamic and the way that it affected his family, that began a road to a more balanced middle path. She said, oh, well, I really did enjoy doing the stay-at-home mom thing, but it was just so stay-at-home mom where it was like, all I know is kids and all I know is kids' TV shows and all the activities that we're supposed to do.

1:11:46I miss, she craved time at an office to drink coffee and type on email, you know? And me, on the other hand, I leaned so far into growing my career that I was working too much. I was traveling too much. Think creatively about that third way. That is the first key takeaway. Key takeaway number two. Even before we get to some of these advanced financial concepts like Coast Fire, before any of that, something as simple as an emergency fund, three to six months of expenses saved, can fundamentally change how you react to everyday family chaos. I know there are going to be many people who are listening to this who think, wow, you're talking about Coast Fire.

1:12:32You're talking about a half million dollar investment portfolio. That's great. I am nowhere close to that. If you're feeling that way, that's okay. Because just starting with an emergency fund, that alone can remove a lot of anxiety around minor mishaps and accidents. For example, once we had our three to six month emergency fund, anytime my kids would break something, I felt a little bit more calm as a parent, knowing that I had that money set aside instead of saying, oh, why did you do that? That money is a scarce asset. You shouldn't do that. That's an opportunity for me to put fear into their brains right away at a young age.

1:13:11That is the second key takeaway. Finally, key takeaway number three. Teaching kids about financial trade-offs, money trade-offs, can create wisdom at an early age. So Andy talks about how his son was expressing this keeping up with the Joneses kind of desire. Oh, these other kids in the neighborhood have this really expensive tricked out basement with a full basketball court in their basement. How come we don't have that? So it was like keeping up with the Joneses. Why can't we spend as much as the other families? Andy didn't say no. He didn't say we can't afford it. He did not put up that barrier.

1:13:51Instead, he said, you know, we could. We absolutely could. But these are the tradeoffs that would be required. These are the real costs of doing that. And he explained those costs in terms that his son could understand. The result shows how kids can grasp complex financial concepts. They can grasp opportunity cost when it's presented honestly and it's presented with the framework of this is a choice. Buddy, we could have a sport court in our basement, but you know what that would do? That would require dad to go back to his corporate life, continue to grow my income and travel a lot more and be gone a lot more than I am right now.

1:14:31Would you like that? And he said, oh, no, no, I love being with you. You know, I love having time with you. Those are three key takeaways from this conversation with Andy Hill from the Marriage, Kids & Money podcast. Thank you so much for being part of this community. If you enjoyed today's episode, if you got value from it, please share this with the people in your life, your friends, your neighbors, your family members, your siblings, your cousins. Share it. You know what I'm going to say with that neighbor who has the expensive tricked out basement, the one with the big basketball court. Share this with them.

1:15:03Share this with the Joneses, who you're always trying to keep up with. And with the Kardashians, because we're keeping up with the Kardashians too. Share this with the coworkers who you think would enjoy going part time. share this with the boss who you think might never let you do it. Share this with the people in your kids' sports leagues. And share it with the friends who are never free to play pickleball on a Wednesday morning. Share this with all the people in your life because that's how you spread the message of FIIRE. If you want to discuss this episode with other members of our community, head to affordanything.com slash community.

1:15:34And please subscribe to our newsletter, affordanything.com slash newsletter. All of it is absolutely free. Thank you so much for being part of this community. I'm Paula Pant. This is the Afford Anything Podcast, and I'll meet you in the next episode.