469 | A Tale of Action | Navish Bahl

27:26But then when you send that message, is it basically like a copy paste? Like, do you have a script that you mostly copy and paste and maybe change a little bit for the person? Or how do you think through that? To answer your first question, yes, it is a more targeted approach. For example, my wife is in HR and she is in a particular field within HR, compensation, governance, and compliance. so she looks for folks who have similar experience in the banking industry which she works in and she finds those people and they all work similarly in the same geographical area within downtown toronto on the bay street and she just casually asks them for sometimes a coffee and covid she would ask for a video call so it is very targeted you are very right in many cases you would not get responses and that's fine it's again a numbers game you just need like one or two or three responses That's all you need.

28:19The script, it gets naturally created when you're in the flow of applying for jobs and reaching out to people. So we do have scripts, especially when we are hunting for jobs, but we tend to reuse those scripts even when we are trying to see what's out there, just like the financial mechanic recommends. So we use, reuse those scripts. Okay, got it. So right. Most of this is done. You're really creating a network is what you're doing. You're creating a network. You're trying to find potential mentors or people who could positively impact your career in the future. But again, no spamming. You're trying to make legitimate contacts.

28:57And like you said, hey, let's meet up for coffee. Let's meet up for a virtual Zoom coffee or something like that. Okay, so that all makes sense. I like that a lot. And you're doing this in advance. This is not, hey, I'm scrambling. People can tell when you're desperate, right? Like I'm scrambling for a job. Can you help me? I need help immediately. This is more, you're leaning on, I'm thinking about a lot of like Robert Cialdini, the famous professor and author, and like a lot of his principles of like liking. And what is he has the six principles? There's, I don't know if there's any reciprocity in here or not, but in terms of, Hey, these people know you at this point, they've had a coffee with you.

29:35So those loose connections, that's another thing that he talks about is a lot of these jobs are not, you don't generally get a job from your best friend recommending you. You generally get a job from this, this loose network of connections that you built up. And like you said earlier, Hey, a new job opened up in their organization. Who do they think of? They think of Navish and the person I met for that nice coffee a couple of years ago, who sounds like he has a similar job title or might be potentially good in this. So that's a really neat strategy. And it's like you said, it's worked extraordinarily well for you.

30:13Yes. And we sometimes reverse engineer when we are actually looking for a job. So we would look for job openings in our targeted organizations. And then we'd find people in those organizations who are in similar departments and then start reaching out to those people proactively while we are in our current job and start building those connections. Yeah, that's great. I think this is really going to help a lot of people because most people, or let me say myself, I'm not forward enough generally to do that. But I think that could be something that's, that is really useful and really helpful. And we all want to make connections, frankly, just in general.

30:48And if you can do this and ask legitimate questions, be really interested in that person, they're going to want to help you. And I think if you can do that with a very minimal ask, especially like a zoom call where the person doesn't have to drive somewhere and get coffee, even though that's not so bad either, right? But if you can do a very low key ask and still make the same connection, there could be a lot here. So Navish, that's awesome. Can we backtrack? Yeah, of course. Okay, I want to make one point for the audience. Basically, I've learned through my career. So I've worked in engineering, I've worked in product management within the tech industry, and I've worked in sales.

31:25And I want to spread this message that if you have the proclivity of talking to people and being social and just general nature to help people in a consultative manner. There is a job called Solutions Engineer, which is a mix of engineering. You still geek out, but you're trying to sell. This makes the most amount of money. Hands down, like if an engineer is making 100K, a sales engineer would make about 150 or 180K because they are bringing in revenue for the company directly. So they become a lot more valuable and they are building connections with their customers. So they become really good assets if you're performing well for the company to hold on to.

32:07So I just wanted to pass this message to the audience if it hasn't been passed along earlier. Yeah, no, I don't think anybody's ever mentioned that specific job. So, okay, that's cool. And that reminds me almost of, I'm thinking about partners in law firms and accounting firms. Most times there are the technical partners and then there are the partners who bring in a lot of new clients and new revenue. And there's a lot to be said for that. So maybe even if you're not the most technical person in whatever field you're in, being a good connector and being able to drum up business for your company, that's a significant value as well.

32:42So it's cool to see that that exists even in the technology field, because I think most people just immediately think, oh, technology, this has to be encoding or whatever it is, right? Like I need to be the best in the world. You're saying, okay, there's some aspect of being a good manager. There's some aspect of being a good schmoozer and being able to build a network and get new, new business and new clients. So yeah, that's a really interesting addition. I like that. So let's kind of pivot a little bit here. So into the real nuts and bolts of your five journey now. So there's the raising income side, there's the investing side, and there's the generally cutting expenses, any very specific actionable things jump out that you feel like you and your wife have taken advantage of that you think could be really helpful for the audience?

33:30Yep. It all started with that curiosity, a strong desire to find the answer, what could be a really meaningful life. Then the next action item was education, lots of reading, lots of listening to podcasts, lots of reading blogs and articles. The real tangible step was the baby step that we took towards investing of$1 ,600 per month. Then from there, we graduated to ETFs. And what we have done is we have chosen index ETFs representing Canadian index, representing US indexes, representing international indexes, and we have split them so that every time we make a new contribution, it's going to that same contribution targets which we have allocated for.

34:17So because we are in this accumulation phase, we don't necessarily sell to rebalance anything. We just buy index ETFs in our targeted buckets. And whichever bucket is short as compared to the other, we try to buy that. And one more thing which I'd say, which is probably outside of typical advice is don't time the market. And I don't try to time the market. But whenever there is an opportune time when the markets are down and you are in this accumulation phase, I time the market a little bit. I try to buy when the stuff is on discount. If I have some disposable income, which I'm not necessarily going to use, I try to capitalize and buy as much as I can, as much as my financial comfort allows.

35:01I love that. And I know JL Collins has talked so many times about that on the podcast where, okay, you're not timing the market. You're reframing something that a lot of people think of as negative, which is the stock market is currently down right now. The current prices are down. As opposed to saying, I'm in an accumulation stage and wow, I get to buy these great companies on a discount. And what you're saying is if you have extra money lying around, or if you had a schedule normally that, oh, I'm not investing until the first of the next month, do what you can to expedite that and buy now on a, on a discount on a sale, really.

35:38So I think that's a really good psychological way to look at it in terms of, Hey, I'm not just saying this is all doom and gloom. My current net worth is down. Oh, I shouldn't be investing. I knew this was a scam after all. Right? Like a lot of people think that's where their mind goes. as opposed to you saying, this is a 30 to 50 year journey. And if I can buy these amazing companies on sale, I'm going to do it. So I like that. And I wanted to ask about something you said a minute ago, which was you have these different buckets and you're almost trying to like balance them in a sense, in terms of where the new money goes.

36:12It sounds like you're attempting, that's what a lot of people do in terms of like rebalancing their accounts. And maybe, maybe you do that every year, every six months. Am I understanding right that you're essentially trying to rebalance with new money that comes in? That's right. So we have Canadian indexes set to about 30%, US set to about 40%, and international equity set to about 30%. And so I've gotten rid of bonds just because of the performance lately. And I feel I am in this game for a long term. so I don't need to have that safe net of bonds just yet. I have my emergency fund which is another thing which we did which we can talk about if we need to bank upon it.

36:57So Canadian is 30%, US is 40 % and international is 30%. Every year in the beginning I see how much is each bucket and then the new contributions which we make get allocated so that it come out to this 30, 40 and 30 mix. And based upon what I decided in the beginning of the year, I just start contributing in those buckets. So if US is less, I start contributing a little more in the US. Interesting. Okay, that's cool. So generally speaking, I don't love because it does sound like a little time in the market in a sense, but what you really are doing is you're rebalancing. And I think that's something that a lot of financial experts really do.

37:41They significantly advise you to rebalance. And that's something that frankly, most of us don't do, even though we might want to or say we're going to. So yeah, that's another interesting rethink on that. I like that. So yeah, you're doing these little subtle variations that are making a difference. I like that very much. So okay, you floated emergency fund. Is there something interesting with your emergency fund? We were first having our emergency fund in one of these big banks, which gave you about 0.001%, maybe sometimes even less. And there is no brick and mortar bank in Canada, and I'm sure there are plenty in US, which gives you about 2.5 % on just the money which is sitting in your emergency fund.

38:21So I transitioned all of those emergency funds to this no brick and mortar online only bank and we earn a decent enough interest, which again goes back to building the emergency fund. We don't necessarily use that cash right now. If we have a lot of it, it could potentially go into some of the purchases or it could go into one of those real estate adventures when we get to it. Yeah, that's cool. I know there are a lot of online banks here in the US that now in this new interest rate environment for the first time in my adult lifetime, basically, there's actually decent interest rates. I've seen upwards of 5 % on some accounts, which is amazing.

39:04I know one of our partners is CIT Bank. And at the time we're recording this, their account, if you have$5 ,000 or more, has 5.05 % interest, and it's pretty wild. So yeah, for anybody listening, we'll put this in the show notes, but it's chooseabout.com slash CIT. And we have a whole review on the bank and different options. But that's where I'm parking my emergency fund. Because honestly, when I came out of college, I remember ING Direct, it was the very first online bank and they had 5%. And then for the last 15 to 20 years, I've looked back wistfully on that. Like, wouldn't it be amazing if it ever came back to that?

39:41And it seemed laughable, but we're back now. There's actually savers are being compensated really well, which is pretty awesome. Thank you. Navish, I wanted to ask you about tracking your expenses, because I think this is something that you've hit on as something really important in your financial journey. And I think people are all over the spectrum in terms of tracking every expense down to the penny or just having a loose budget or having no budget whatsoever. I'm curious if you could talk through your specific strategy on this. Yep, definitely. I'm naturally frugal myself, so I don't spend that much, or at least I used to think that.

40:24my wife is on the spendier side so I started the expense tracking thing basically to get more data to basically corroborate what I was thinking but I think we started on the expense tracking journey a little late. I think if you're starting on your FI journey this is probably the first thing which you should start. You should start what's coming in and what's going out and what's remaining. We started on it a little late but that's fine better late than never but there were so many things which we uncovered which we were thinking hey we do not spend that much money eating out and we do not as compared to some of our friends but we still ended up spending more than what we expected sometimes even 500 600 dollars which was greater than what we were expecting about 300 to 400 dollars we started also seeing that our grocery bills were going higher because some of the grocery stores which were closer to us were charging more as compared to more frugal better cost-effective options so we changed where we shop groceries and that helped a little bit we also started seeing certain patterns of shopping where we would not hold back sometimes even if we were higher than what we expected to be and once we had that data screaming back at us it was giving more evidence to my wife that, okay, that one or two things which she forgets or I forget sometimes, those still add up to a significant number.

41:55Yeah, I think just getting it in front of you and seeing the data, seeing the truth is so important, which is why I say to people when you first find financial independence, the very first step you need to take is just put this on paper. It might be uncomfortable. That's fine. It is uncomfortable. Write down all of your assets. You write down all your liabilities. What's your net worth? It might be negative. It might be close to zero. That's okay. You're here to make your life better, but you need to have it on paper. And I think the same goes true, certainly with your income and your expenses, because I think this is why a lot of people are running at zero or negative every month is they just have no idea how much they spend.

42:34They think on some levels that they're frugal or things are going okay, but yet they're spending all their money and they don't know why. And it's just kind of getting frittered away in like little increments. And like you're saying, Hey, we didn't go out to eat as much as our friends, but it's still so many hundreds of dollars more than we thought. And that doesn't mean to live a life of deprivation. Nobody's arguing that, but it's just, Hey, sometimes you just need to, you need to see it on paper and then you can set up a real budget if that works for you. And I know you have an interesting take on budgets and kind of like appropriating money maybe for future expenses, because so many people just react reflexively in terms of, oh, no, something broke in the house.

43:17What are we going to do? Or, oh, I just go into my general emergency fund, which is perfectly fine if you have one. But I think you have very specific appropriate, I'm using accounting term, right? Like appropriated funds or buckets. Talk us through that. Yeah, definitely. But before I do that, I want to want to say that we do fall out of our budget sometimes and it goes out of whack and it's just life and it's okay for anybody to get into that situation as long as you have eyes on it and you normalize or try to normalize some of those discrepancies and we were seeing some of those discrepancies for example the property taxes come to you every quarter and that raised our monthly expense by about a thousand dollars every month whenever that hit.

44:02Most recently, we bought a secondhand car, by the way, and we just paid cash for it. We did not want another monthly installment to go out. But recently, we had to change tires on the car, and we had to change the brakes, and we had to fix another transmission issue. Combined, that costed about$2 ,000. And that, again, created a spike in our monthly expenses, even though our other portions were taken care of. But these expenses were basically throwing our target expense for a month out of whack. And if that goes out of whack, then your FI calculations also start going out of whack because now you would think that your FI number is slightly higher or your expenses are slightly higher than your FI number needs to be higher.

44:48So what we did was we created these buckets, which are essentially travel. We have a new baby coming in, baby and home and auto expenses. And we have a set amount going from our checking accounts every month to these buckets. Now, every time we get one of these bigger expenses, we just take money out of these buckets. And then it normalizes most, if not all of those expenses. And now we don't see a big spike in our monthly expense. Okay. Yeah, that's very cool. So what I like to say is life is lumpy. And what that means is right, every so often, you're going to have a random$2 ,000 expense that you didn't really account for that month.

45:27But if you really were honest about your financial life, it's not all that surprising in a given year to have these extra$2 ,000 of expenses. They're not even extra. They're just part of life. But yeah, when you're saying, if you're looking on a very micro level of calculating your fine number off of that month's expenses, which I don't advise people doing because you look at an entire year's But if you're just looking at the micro of, oh, wow, our expenses were$2 ,000 extra this month. That's$24 ,000 a year. That's$600 ,000 extra I would need in my five number, which is absolutely crazy, right?

46:01Like you can't think like that. You need to think of in terms of, okay, this is a normal amount in a given year. And I think what you're doing is you're just setting up these funds so that, okay, we've got it covered. So it's a psychological thing as much as anything, because frankly, you could have all that money just sitting lumped together in one account. and it really wouldn't make all that much of a difference. But this is that psychological benefit that helps you and your wife. And it sounds like you have a pretty sophisticated spreadsheet. So I might be missing something ever so slightly, but I like this.

46:30This is cool. Yep. Thank you. So Navish, you said that you have a baby coming soon. So congrats. I know that's a big change in life. And one thing that, so we're talking about family, right? Is you and your wife got on the same page in terms of financial independence. But I think that's not always so easy for people. And I think you have some info or strategies that you might suggest to people in terms of, okay, you found FI first and you not convinced your wife, but you got on the same page and you looked at it as, okay, we're a team. Are there one or two things that you would recommend to people?

47:07Because there's so many people out there listening who are in that boat where, hey, they've found this superpower that is FI and they don't know how to explain it to their significant other or spouse? I'll tell people what not to do because this is how I started. I was reading these books and the Kindle app has this way of highlighting quotes and then sending them as text messages. And I have this habit of waking up early in the morning and going through my reading routine before I start my work day. And before my wife even woke up, she would have like 20, 30 text messages from me of these quotes, which would tell what we should optimize in our life.

47:43that struck well for maybe a day two or like one or two weeks and then she did not assimilate all of them understandably so after that I just started taking a more human approach of actually talking about what this journey provides as benefits to us as a couple to us as a family rather than just myself and why am I bullish about it and if these are the top five or ten things we basically long in life, these matter to us the most, then these are the actionable steps which we need to take. So we had a deep conversation. That's number one. And I think the second most impactful thing which we did was I took her to a cam mustache event where she saw these people who have reached FI in their 30s, 40s, 50s, 60s and above and how that entire journey, going through that journey and living that five life has changed their perspective on life that was a game changer that was probably hands down the most important thing when she heard it from not only me but from like 20 other people 50 other people and ultimately the third point is the wear and tear of the nine to five grind like that's getting to her now and she doesn't want that to be her reality for the next 50 years of her life.

49:07So that also ultimately caught her on board with this approach. Wow, that's great. So three pronged strategy, which each one is equally as important. I like that a lot. And yeah, clearly, the message is don't send 20 or 30 text messages to your significant other every morning, probably not a good strategy. But I think your excitement probably shown through. I think that was maybe what got the ball rolling in terms of, hey, let's have these conversations. Let's talk about what do we want our lives to look like. Let's meet other people in this community who are doing something different with their lives.

49:40And I think that's important. And that's why we set up all those Choose It by local groups so many years ago, and now there are hundreds of them across the world. So choose it by.com slash local, if you're interested. There are Camp Phi events all across the country. Like you said, Camp Mustache. There's the Phi Freedom Retreat in Bali. There's Economy in Cincinnati, which is remarkable. there's just there are lots of ways to meet other people in the five community and yeah i think it's important i think it helps to see other people and you're in real life doing this so i absolutely love that avish this has been wonderful i really appreciate all the actionable advice that's what gets people up off the couch and helps them make change so thank you for being here and i'd love it if you wanted to uh tackle the old hot seat questions you have any interest let's do it All right, awesome.

50:28In a world drowning in debt and rampant consumption, trapped by the chains of lifestyle inflation, these questions highlight the secrets of those who are broken free. Welcome to the Choose FI Hot Seat.

50:55all right question number one a podcast blog or book that you've enjoyed recently and has had an impact on your life the small and mighty real estate investor by chad carson he released that most recently that gave me a blueprint of what i should do with the equity i've built into the house? And how should I go about creating a business plan out of that? That's probably the best I can think of right now. Yeah, that's a wonderful, wonderful book. And like we said, we referenced the episode that Chad was on earlier. And yeah, just a really good rethink for people who are looking to get into real estate, but don't want to leverage everything, don't want to maximize everything.

51:33They want a five version of real estate investing. All right, question number two, an inflection point in your life that was especially memorable or meaningful? It was this conversation I was having with my friends, which actually left a big hole in my understanding and piqued my curiosity of finding a better way of life. And I started not only reading about people who have done it in a small and mighty way, but I ended up finding the FI community that way. Yeah, that first step. And yeah, that was an important conversation. And hey, we don't want our lives to look like this for 50 years. What can we do?

52:09All right. Question number three, your favorite life hack. I would give you two. One is reading. So constantly educating yourself. And second, creating lists. Okay. Well, you can't just leave us there. Creating lists. What are we talking about here? So what I tend to do is I create annual goals, but then I distill them into weekly goals. So every week before I start my week, I have a main goal of the week and that's segregated into two buckets, one for work and one for personal. Do not want to inundate myself, just one single goal for the week. That's about it. And then from that, once I have this mapped out for the week, I then create like goals or milestones for the day.

52:50Oh, wow. Okay. So one big goal for the week. That's really cool. I like that. Cause yeah, I get caught in analysis paralysis a lot of times or, oh, what's going to make this a successful week. And I have a laundry list of to-do lists, but does that really solve something big, right? Like, did I actually accomplish something? Whereas you can say, all right, I accomplished that big thing for the week. That's really great. All right, let's move on to question number four, your biggest financial mistake. I did not start investing early enough and I actually wasted a lot of money in my own weddings.

53:24I don't even know how many thousands of dollars we put into our weddings, which was great, fantastic event. But if I were to do it again, I would not spend that much money and I would rather invest. So I started late by late. I mean, I started in my thirties, early thirties. Um, yeah, if you start making use of the compound interest earlier in your life, then it gives you wonders down the road. So the earlier you start, the better. Yeah. Agreed about the earlier you're starting, but also you are a testament to, it is quite literally never too late and certainly not too late in your thirties to get started.

53:57It's not too late in your 40s, 50s. You just have to get started. So huge congrats to you and your wife. All right. The advice you would give your younger self? The same thing. Start investing, but also start educating yourself. This is something which I plan to teach our to-be-born daughter. Like give her the financial fundamentals. And also not only to our daughter, but whoever I can teach this and impart this knowledge and whoever is willing to learn. This is something which is not taught anywhere. have lived in different countries. I've not seen it being taught officially any place, but it's probably the most important thing which one should learn as they're adulting.

54:36All right, my friend, we have one last bonus question here. So is there a purchase you've made in the last, let's say, year or so that has added the most value to your life? I bought a$1 ,700 bike, which is pretty expensive just from the price tag, but we have had so much fun, me and my wife, just going on these bike tours, going on these national parks and biking through them. So I'm very happy with that purchase. Oh, that's cool. Are these, is it an e-bike or a traditional? Just a traditional hybrid bike. Okay. Wow. Very cool. Yeah. Get out in nature, exercise, spend time with your wife. That's yeah.

55:15Could be a lot worse than that. That's fantastic. All right, Navish, this has been fantastic. Thank you so much for being here. Thank you so much for all the very specific actionable advice. And if people want to follow up with you, is there any way for them to reach out to you? Folks can reach out to me on LinkedIn. They can just search by my name, Navish Behel, and I should show up as one of the first results. Okay, wonderful. And we'll try to get the link in our show notes. So if you could send that to me, that would be wonderful. And all right, my friend, congrats on the upcoming baby. And until next time, thanks for being here.

55:46Thank you so much, Brad. Thank you for listening to today's show and for being part of the ChooseFI 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. I 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.

56:19You 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 crowdsource personal finance show. And finally, if you're looking to join an in real life community, we have choose a by local groups in 300 plus cities all around the world. So head to choose a by.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.

56:54Choose a FI 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. And 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.

57:39Thank you.