443 | The Invisible Nature of Spending | Ginger Roundup

26:10She came up with a fun challenge for herself to basically walk one mile a day outside on average. So she kind of gamified it in a sense where I've heard a lot of people do this certainly over the years here on Choose of I with maybe paying off debt where they have a number of boxes and they fill the boxes in or they check them off or something. It's like a very visual thing. So she created just this, just a very long sheet of paper and cut it up into 365 different boxes. And she just literally fills them in with like a different colored marker or crayon when she completes it. And it's just really neat to see the progress she's made.

26:50I mean, we're almost halfway through the year at this point and it's just fun. And And it's another reason to keep that momentum going of, hey, I just really want to be outside every day. It just makes me feel good. Yeah. This reminds me of a message you got about someone else who was trying to start up a fitness routine. Yeah. Ginger, good call. John actually wrote in and he read Dr. Peter Atiyah's book, Outlive, which is actually something. I'm reading it right now. I'm reading it right now. Oh, that's awesome. Yeah. Yeah. So I have mentioned Dr. Atiyah so many times here on the podcast. I'm a huge fan of his.

27:25I've been following him for almost a decade and he has become extraordinarily famous in the last year or so. He was the medical advisor on the Limitless show with Chris Hemsworth on Disney plus, which if you haven't watched is just awesome. I highly, highly, highly recommend it. And now he has this book, which I think the last time I checked, it was in the top 10 on Amazon. So just hugely popular. And yeah, John was asking, he was asking a bunch of questions about zone two fitness, which is like a type of cardio workout and how to get started. I think he's a little more advanced because he was also talking about maybe some supplements and things like that.

28:04But I think it was just for me, like a good framework of, oh man, if I was trying to explain to somebody how to get started in fitness, what would I say? And now this ginger is fraught with peril because everybody retreats into their own little camps when it comes to fitness. And I'm not trying to start a fight here or say that I'm doing anything that's perfect or not. But what I do is I think what I do in life and what I hopefully have brought to this podcast for 600 episodes is I try to curate and synthesize information. And I'm not a world-class expert on fitness or health, but I listened to world class experts.

28:40And I tried when I see people talking about the same thing in totally different arenas who may have never met each other. I'm like, oh, there's there's something here. So I don't yeah, I don't think you should hesitate at all to share what's worked for you, because that's what we like to hear from each other. You know, we just want to hear like, what has a normal person done that has helped them to meet their goals. Yeah. Well, no, I appreciate that. And, and yeah, I think, right. I am just a normal suburban dad, but I think I've gotten to a level where, I mean, I think my fitness is certainly in the top 5 % of people my age, and I think probably dramatically higher.

29:18And it's just been fun. I think that's one of the coolest things is I've been doing this, uh, this exercise program with Jonathan, which is actually just built around basically building muscle and strength. And it's, I met a guy who is my now he's my personal trainer who I met him online and I spoke about him in the episode I did with Bo Loy recently but I was a little sheepish when I mentioned it Jenger honestly because I think in the back of my mind I still think I still have those old vestiges of like the frugal five mindset and like oh I'm spending a couple hundred dollars a month on a on a personal trainer.

29:56And like my mind goes, oh, that's so much. I can't believe you're doing this. And it's so ridiculous and stupid. And I understand that. But like, again, our minds play tricks on us sometimes. And I can say without any question, hiring this guy, Dean Turner has been the single best decision I've ever made for my health. Like it is extraordinary how much I have improved in terms of strength in four months time. I mean, to the point where I'm, I mean, literally maxing out some of the machines at the gym, like the entire stack of weights, like I'm doing for like very controlled sets. And that's a really cool thing about this programming is it's built around, not just throwing weight around to be a tough guy, but to actually control it, to have both on the concentric and the eccentric.

30:47So like essentially like the up and the down, if you will, and just have control and target certain muscles. And the other cool thing I think is it's built around a lot of rest in between sets so that basically like your central nervous system is recovering between sets. You're not just fatiguing the heck out of yourself and you feel great. Most people pat themselves on the back when they leave because they exhausted themselves and they get very minimal results, but they again feel kind of good because they exhausted themselves. And I think you need to figure out what you're trying to optimize for.

31:25And frankly, like, again, there's not one answer. There's not, I'm not saying my answer is the right answer, but man, this has worked for me just unbelievably. And going back to John's question, I think when I've tried to curate and synthesize this information from experts like Peter Atiyah and Andrew Huberman, et cetera, et cetera, they've talked about this zone two cardio training. So it's basically increasing your aerobic base. And it's actually quite interesting. I would highly recommend that anybody listening to this who's thinking about getting started with fitness, really think about this because essentially zone two training is this little sweet spot where your heart rate is up, but it's not up so much that you can't carry on a conversation.

32:12So as Atiyah says, you can carry on a conversation. You just don't want to. Okay. So you're at that absolute threshold where you're not redlining, nothing's going crazy. You're not sitting there panting. Most of the time you can still nose breathe, which is really important. And you've just, you're not over that threshold where it's just essentially downhill until you get to the point of exhaustion. So theoretically that could be your all day pace essentially. So how it would work is you probably want to do about three times per week for about an hour each. And I believe I understand how hard this is.

32:46I'm not currently doing this, but what it more or less does is it increases that baseline level because how you would do it if you were a runner, let's say, and you might be a competitive runner who's out there running seven minutes per mile or less, but you're just constantly on that, on that level of exhaustion. Well, you might have to take kind of an ego check and step back and say, okay, what could I maintain again at that pace where I can have a conversation, but don't want to. And that might mean a 10 minute per mile pace, which again, to your ego might sound bad because you're a six and a half minute miler, but this is playing the long game.

33:24And Ginger, what do people in the fight community do better than just about anybody else? They play the long game, right? And that's what's so cool. And okay, it might be 10 minutes to start, but then you get it down to 950 per mile, then nine and a half, then nine. And all of a sudden you're at, who knows, seven minutes per mile where you can just maintain that forever. And then your base is just so much wider as a T likes to say, and you're going to see dramatic, dramatic improvements. So I think that's something, and they talk about world-class athletes who I think a lot of us would think, oh, world-class athletes are operating at like peak max functionality at all times.

34:06They're just going all out. And that's just not the case. When you hear lots of different experts talk, most of these world-class athletes, especially in sports like cycling, swimming, and running, they're spending 60, 70, 80 % of their time in this zone too, to establish that base. And it's just one of these kind of paradigm shifting things for me that I just was totally unaware of. And then obviously you do want to get your heart rate up once or twice a week at minimum, just to kind of put the pedal to the metal and see what you got. But yeah, make sure to be miserable for at least 20%. Yeah, you got to be miserable.

34:44But but yeah, I mean, I think, again, this is just my opinion from what I've curated from people. But I think realistically, for most of us, strength is the absolute most important thing we can focus on that we aren't. And it's not like to be a tough person. It's not to like have big muscles. It's just that realistically, they say every year from when you're 30 on, there's this thing called sarcopenia where basically our muscles start breaking down if we're not actively trying to strengthen them. And that is just an inexorable slide down to essentially nothingness, right? And if you know that's happening, you need to offset it and you need to proactively offset it.

35:24Please check out Brad's book, The Slide to Nothingness. The inexorable slide to nothingness. Yeah, yeah, yeah. So this is so interesting because when you were telling me about John's message and you said, oh, John's wondering what to do to get started, I interpreted the question differently. I assumed that he was talking about mindset. And so for those who are like, okay, I know what I need to do physically, but how do I get over the resistance to starting this kind of thing? What would you say to that person? Yeah, that is a great question too. Or just, you know, put another way, what worked for you?

35:56Yeah. I mean, I think, and I can say very specifically, especially with this new workout that I've had with Jonathan is, is twofold. Well, it's accountability. So I have accountability with my trainer Dean because every single day he's looking at my logs. He's looking at how many steps I took that day. He's looking at my fitness results from the gym workout. And then just a couple other things with, with some nutrition in the background, but also just knowing that I have Jonathan getting there at eight o 'clock in the morning waiting for me. And if I decide to be lazy one day, well, I mess him up too.

36:32And I think just having that friend who's there with you is, is a big thing that that's not going to be the ideal scenario for everybody. That's not going to be realistic for a lot of people, but I think it, it really goes back to what James Clear talked to us about, right? The author of Atomic Habits way back. It was four and a half years ago, I think in episode 157, where he just talks about these little things, just do something little, like put your gym shoes and your gym clothes out the night before and just cut down that little bit of friction, right? Like go to the gym for a minute or two, as ridiculous as it sounds like establish the habit and just make it happen.

37:10Like, you know, maybe you're somebody who sat on the couch for 10 hours a day for the last decade. Well, you can sit there and wallow and beat yourself up about it. Or just like everything we do here, you can get up and take action to make your life better one tiny little percent at a time. And that might mean your first walk. You might just take a walk every day. Walking is fantastic. It's one of the best things you can do for your health. Walk 100 steps the first day. Walk 110 steps the next day. I mean, we're talking one minute and then you get up to two, five, 10. All of a sudden, your life looks dramatically different.

37:43It's funny you bring up James Clear because I was thinking about that book as you were talking, because another thing that I've noticed about you is the way that you talk about physical fitness is it is tied to your identity. And he talks about that being the most powerful motivator that when we say, okay, not I'm going for a run or I'm going to a gym, but I'm a runner. And I hear you using that kind of language where it's like, I'm a person who does this every day. This is important to me. So there's a way in which you've integrated into your life so that it's not about tracking how many runs you've done or how much you've been in this particular zone.

38:22It's about this is how I live my life. And that's really different and makes it really a lot easier. Yeah, that identity is it really is important. This is in every aspect of life, right? I'm I'm the type of person that dot dot dot. And yeah, In this case, it's not something that's short-termism. It's, yeah, like you're saying, I'm a healthy, fit person. And I think that then transfers into a ton of different areas of life. I mean, if you think, even for somebody who goes to the gym a bunch, right, one hour a day for five days a week, but then the other 163 hours that week are just sitting around doing nothing, you're not a healthy, fit person.

39:02You wouldn't fit that identity statement. So, I mean, I'm constantly looking for just little ways to, I guess, increase my overall health. And it's not something I'm fanatical about, but it's just, again, it's that same mindset of FI. It's, all right, I'm just looking for tiny little 1 % things. And they start to add up over years into decades into something truly extraordinary. It is the same thing because you're saying when you talk about what are those different things that I do besides my workout, it's about being a congruent person. So how do I live up to that identity? How do I live a life that's in alignment with my values?

39:38And that's the same if it's money. It's the same if it's health. Okay, totally agree. So Ginger, we got another email, this one from Joe. And Joe was asking about a retirement calculator that allows for his pension. He said he also has a 457 to accompany his pension, but he doesn't believe that the numbers are really working out right, as he said, real in the calculator he's using and he's curious if we had any suggestions. So I think the best way to do this, and this is just one of those almost like annual reminders that I like to give out because I do get this question a lot is, okay, I have a pension.

40:16I understand that my fine number is in very broad general terms. It's take my annual expenses and multiply by 25, right? And that gets me to a net worth where I've reached financial independence, but it seems to be confusing for many, many people that, oh, I have a pension also, or I have this other supplementary income or some such that is essentially guaranteed. So just for the sake of this example, we'll say it's some guaranteed number, but I don't know how to figure that out because it's not a lump sum. And we've spoken with, so we've had Grumpus Maximus on the show a bunch of times, episode 57, episode 227, and I think 316 also actually.

41:00And he had the book, The Golden Albatross. And it talks about basically, is your pension worth it more or less? And what came out of that, and I think I tried to distill this really quickly was, okay, the easiest way, this is actually way easier than it seems on the face of it. And really this could work with, like I said, something that's guaranteed, like a social security or something that you know that's coming in every month that you want to factor in, but you don't have that lump sum to figure it out. Well, again, it's way easier than you'd expect. You just take, take your annual expenses.

41:33So let's just say that Joe has a pension that's maybe bringing in $40 ,000 a year, just hypothetically. Okay. And his life expenses are$60 ,000 a year. Okay. So 60 ,000 under a normal circumstance, you would say, okay, I just take my$60 ,000 per year expenses. multiply by 25, that gets me to one and a half million dollars. And that's my five number. All right. So that's the standard five calculation. But in this case, Joe, again, hypothetically has a$40 ,000 pension. So you just very simply say, well, my expenses aren't 60 ,000. Sure. My gross expenses are$60 ,000, but really net after that pension, I just subtract back that pension out.

42:18And then what's left is what do I have to make up for that's not guaranteed coming in? It's$20 ,000, right? So because the 40 ,000 of the 60 expenses are covered, they're coming in every year with this pension. So you don't need to calculate based on 60 ,000, you need to calculate based on what's left, which is the 20 ,000. And then you multiply that by 25, and you get a fine number that's really quite different. It's$500 ,000 in that case. So Joe would have to reorient that to, okay, when my 457 and my other accounts, et cetera, reach$500 ,000 in this case, then I've reached FI because of this pension that I have that is guaranteed and is coming in every month and every year, basically.

43:02What if it gets a little bit complicated because Joe wants to retire before his pension will kick in? Yeah, that is a great question. So this would, you certainly would need more like advanced modeling than you and I can do in our heads here, unfortunately, but you'd have to create just essentially a bridge. And yeah, I could flail trying to figure out how to talk about this from the spreadsheet that I'm seeing in my head. But in essence, you would have to say, how many years is this extra? And you have to find a way to cover that. And it might just mean it could be something actually as simple as, okay, what if the shortfall, so it's$40 ,000 dollars per year, because we're saying that's what his pension is, you could actually potentially exhaust the money.

43:49So let's say I'm doing this off the top of my head. So bear with me. I might have a better answer after the fact, in which case we'll follow up the next time we do a roundup. But I'm just thinking, okay, he doesn't need 40 ,000 times 25, which would be the fine number, because there's an end date to this. So he actually needs, as we're saying, maybe he's retiring 10 years early before he could get his pension, he needs to make up for that$40 ,000 for 10 years. That could be a scenario where, all right, again, to cover his fine number for the other$20 ,000, he needs a$500 ,000 net worth. And that is like sacrosanct.

44:27We're not playing with that. That's just there. But maybe he just needs an extra$400 ,000 because he could just literally take out$40 ,000 a year for the next 10 years, exhaust that extra money. And then at the end of that 10-year period, he again has his net worth of 500 ,000, which covers the$20 ,000. And he has his pension then coming in for 40 ,000 and voila, that covers his$60 ,000. So that's an off the top of my head. And I think that would work. You'd have to index it ever so slightly for inflation. So I wouldn't say have exactly$400 ,000 to the penny. But I think Ginger directionally, that would be a pretty nice, simple way.

45:09And in that case, he would need basically$900 ,000 instead of$1.5 million, which is what he would need if he just did the simple calculation of, hey, my expenses are$60 ,000 times 25 gets you to that$1.5. And I loved what you said about how this works for Social Security too. So if you're planning on retiring closer to a traditional retirement age, if you're planning on your Social Security being a fair chunk of your retirement, then you just do the same thing, right? Exactly. Exactly. And I think a lot of us in the FI community don't factor in Social Security. I think so many of us are layer levels of conservatism with our money on top of each other.

45:49It's like, oh, the 4 % rule, that's way too aggressive for me. So I'm going to use the 3 % rule and I'm going to count social security as zero and blah, blah, blah, blah, blah. And I'm going to work for three extra years. Like, right? Like we get caught up in that. And I think a lot of people, when they look at the numbers say, man, we're just not being even close to aggressive enough. And really that's costing us potentially years of our lives. But I think a lot of us just have that ingrained need for safety. And I mean, obviously, nobody can know where the future of politics and the winds go.

46:22But I am factoring in in my own calculation. The worst case scenario is Social Security takes about a 25 percent haircut and I get about 75 percent of what my anticipated benefits are as of today. I think that realistically, if anybody, just from a strategic standpoint, like I look at politics and things like that from like a strategic standpoint is nobody in their right mind, no politician in their right mind, and certainly not enough to pass the end of social security is going to completely cut social security. The likelihood of that is essentially zero. So if you're factoring that social security is going to be zero for you, I think you need to reassess risk because it's just not practical.

47:04Yeah, I was laughing earlier because that's me. And it's not because I think Social Security won't be there. I think from what I've read, too, I think 75 % you can probably count on. But there's something about the mindset of like, well, what can I control? And that's so far away, you know, but I'm laughing because that's dumb. That's, you know, that's so dumb. I should be factoring it in for sure. Yeah, but I get it. And especially the control which you can control, that appeals to me. And I understand that. And yeah, this is obviously something outside of your control. But again, I think if we're being intellectually honest and reasonable with ourselves, there's a high likelihood.

47:44yeah high likelihood at least 70 of the benefits will be there so you know we'll see but uh yeah i think that was that was a good question certainly and and hopefully we helped joe and helped other people really think about this because it's there are lots of different aspects i mean we we talked about the most obvious one which is social security but who knows maybe you have some rental income that's coming in and you just you didn't know how to mentally account for it and I think it's way simpler. You just net your expenses with that essentially guaranteed income that's coming in. And then you factor into, okay, now I can apply the 4 % rule or whatever, whatever rule you decide to use.

48:22I loved how last time we ended on a win from the community. So let's do that. Yeah, that sounds great. We definitely, we have a bunch. So let's go for it. Okay. So this one is from Sarah. She wrote in and said, I just found your podcast a few weeks ago and already it has helped me in so many ways. I feel as though all I've done is make mistakes trying to do what I'm supposed to do. Listening to the podcast, especially addressing the psychology of decisions and money has really made me feel like I can turn things around. It doesn't have to be perfect. It just has to be a little better than the day before.

48:53My 1 % better is I reduced my cell phone bill from$80 per month to$25 by switching from Verizon to Visible. That is cool. I love that. Especially this part about it made me feel like I can turn things around because that's true for all of us at any stage of our growth. Yeah, I think that's exactly it. The mindset here that Sarah is showing is just incredible. And it's never too late. I think that's one of the most beautiful things about FI. As I conceptualize FI is your path to FI can start at any age. It doesn't matter if you're 19 or you're 52 and you're just getting started because you're taking little actions to make your life better.

49:33and plain and simple, it winds its way into real, it's little tendrils in the best possible way into every aspect of your life. And you just are looking to live a better life. And a lot of times that's for, okay, who am I going to spend my time with? How am I going to be healthier and live longer and be able to, to move better? Like we talked about, and how am I going to add value to the world? Right? Like it's all of these things. It's not just the nuts and bolts of the money, but as Sarah's learning, it starts with the nuts and bolts of the money. And man, every single one of those wins just feels so good at the beginning.

50:09All right, we got an email from Joel who said, I just wanted to drop in and share my 1 % better this week. Just paid off our second car. No more car payments, hopefully forever. Now I can take that extra money and start chipping away at the house principal and we're already maxing out our savings in tax advantage accounts and putting more into the brokerage account. This loan was the last remaining relic of the time before I discovered Fi and your podcast about two years ago. Very grateful for all the guidance and encouragement for the podcast and the community and excited for what the next few years hold for us.

50:39He's killing it. That's amazing. And that really typifies our community, right? It's these people who, again, they're coming in and they're taking action. And there's just something about this community of people that's just extraordinary. They're not just sitting and listening, taking this stuff in passively, right? they're actually making their lives better. It's one thing I really like about your newsletter, about how you always include the wins from the community. And there's something so positive about this community about it's not a zero sum game. And we can all be so happy for each other, you know, figuring it out.

51:15Yeah. And that is just the most fun part I have of that of writing that newsletter every single week is just seeing these amazing 1 % wins. And yeah, we do have one more when to read, but since you mentioned the newsletter, I want to mention. So choose a by.com slash subscribe, or if you just go to our homepage and there's a button in the upper right, I think it says something like Brad's five weekly that gets you on the newsletter. And actually, Ginger, I'm going to, I'm going to tease something here, which Jonathan and I were spending more time together now than we ever have probably eight to 10 hours a week at the gym.

51:49And we were just talking in the last day or so about what would it look like to have maybe Jonathan come back on the podcast a little bit, which, yeah, it's super cool. And I think we're both trying to really completely revitalize and overhaul our website and just make it the single best personal finance resource on the internet. I think, frankly, like, and I can say this humbly, like, I believe this podcast is the best personal finance podcast in the world. And I think it has radically helped people's lives. And I think, honestly, I've always been a little disappointed with our website because I haven't had the time and energy to devote to the website like I have.

52:31And certainly Jonathan has to the podcast. And I think both of us are trying to really make a push to make something longer lasting. I think the podcast 600 episodes, they get lost in the ether. There's no way to search them. There's no way to curate them. And we're really making a push to create a lot of new content and put it actually on the website. We're still in the planning stages. So I think there might be this extra little podcast that we do that shows up on our website in some way, or certainly to people who are subscribed to the newsletter. So that is another, it's a little tease. It's still in process.

53:09We're trying to figure out what this is going to look like, but choose a vaticom slash subscribe i think will definitely be uh worth your while for the nice uh free subscription so yeah we'll see but i'm excited jonathan is emboldened and super excited to come back in some way so yeah we'll see yeah okay what's this final win you got okay so jason and alexandra wrote in all those small one percent wins have added up to us reaching coast five this week and we couldn't be more excited we found the five community back in 2020 and it opened our eyes to all of life's possibilities when you live intentionally.

53:42We were lucky to have been naturally frugal into our early 40s, along with solid incomes and a low cost of living area. With some help from sources throughout the FI community, like Choose a FI, we were able to put it all together. We have won our lives back. The FI community is obviously so much more than finances. It opens a window on how to live a better life. Yeah, that's amazing. Huge congrats. they've reached Coast Fi and yeah, the world is the Royster at this point. Obviously, Coast Fi means you've reached a point where your investments are working in the background and compounding and you don't have to save another dollar, but you have to earn enough income to cover your expenses until you get to traditional Fi.

54:24But man, you only need a fraction of the income and it just gives you more options and flexibility. So yeah, big congrats. what a win what a win indeed all right ginger well we got to about half of the list that we have so uh another roundup we will have very very soon i'll be back and look forward to that yeah and people can always find you at fi is fun.com yes head on over yeah thank you my friend for being here this is fun thank you for listening to today's show and for being part of the choose fi community if you haven't already the best ways to get involved are first subscribe to the podcast So you're listening to this on a podcast player and just hit subscribe and then subscribe to my weekly newsletter.

55:06I actually sit down every Monday and write this by hand and I send it out Tuesday morning. So just head over to choosefi.com slash subscribe. And it's really, really easy to get on the newsletter list right there. And I would greatly appreciate it. It's the best way to get in touch with me. You can actually just hit reply to any of those emails and it comes directly to my inbox. So that's the way that I keep a pulse of the community. and how we keep this the ultimate crowdsourced personal finance show. And finally, if you're looking to join an in-real-life community, we have Chooseify local groups in 300-plus cities all around the world.

55:42So head to chooseify.com slash local, and you'll find a list of all of those cities in 20-plus countries all across the world. And if you're just getting started with FI, or you have a family member or a friend who you think would be interested, two easy ways. Choose a Vi episode 100 is kind of our welcome to the Fi community. And even though it's a couple years old at this point, it still stands up. And it's a really great just starting point to get an understanding of what is financial independence? What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to live a better life?

56:19And then Choose a Vi created a financial independence 101 course that's entirely free. just head to choosefi.com slash fi101. And again, thanks for listening.